Verizon Poised on Promising Factors: Should You Consider?

On Aug 14, we issued an updated research report on Verizon Communications Inc. VZ.

U.S. telecom behemoth Verizon reported mixed financial numbers in the second quarter of 2015 wherein earnings beat the Zacks Consensus Estimate while revenues lagged the same. The company gained a number of customers in the quarter and also managed to check churn. Consistent market share gain, strong LTE (Long Term Evolution) sales and the rollout of FiOS Internet have been key contributors to growth.

Verizon recently forayed into the wireline industry with the fiber optic network concept gaining increasing popularity. Interestingly, this has become the most sought-after technology for secure and fast data transmission over long distances. Meanwhile, it is being estimated that the wireline industry will largely evolve around fiber-based gigabit data transmission.

Recently, Verizon completed a successful trial of a new technology on its state-of-the-art fiber-to-the-premises (FTTP) network. Popularly known as next-generation passive optical network (NG-PON2), this technology can deliver an exceptional 10 Gbps (gigabit per second) of upload and download speeds. Management also stated that the system has the capability to step-up transmission speeds to up to 40-80 Gbps in the future.

In June this year, Verizon took over AOL for $4.4 billion. The AOL buyout will not only expand Verizon's mobile-video offerings, but will also provide an access to its state-of-the-art advertising technology which enables automated buying and selling of ads online. At present, AOL is developing an innovative automated technology that will enable advertisers to find video publishers who will help them reach the targeted audience.

Verizon currently has a Zacks Rank #2 (Buy).

Other Stocks to Consider

Other favorably-ranked stocks in this sector include AT&T, Inc. T, Ruckus Wireless, Inc. RKUS and Sprint Corporation S. All these stocks hold the same Zacks Rank as Verizon.

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