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Verizon: The Dow Powerhouse Few Are Discussing

Verizon: The Dow Powerhouse Few Are Discussing

Among the 30 stocks in the Dow Jones Industrial Average, Verizon Communications Inc. (NYSE: VZ) isn't necessarily the most exciting name, but that might not matter for investors who own the stock as it reaches new highs.

The Analyst

Matt Maley of Miller Tabak discussed Verizon during on CNBC's "Trading Nation" segment Wednesday.

The Thesis

Verizon stock has been stuck in the $45 to $55 per share range since 2013, but is finally showing signs of a breakout, Maley said. Up nearly 20 percent in the past three months alone, Verizon shares are testing a key resistance level , he said. If the telecom stock breaks above its 2017 and 2018 high of $55, it can test the 2016 all-time high of around $56.50. A break above $57 per share could result in momentum coming into the stock, Maley said. 

Verizon's stock is well-positioned to move higher, as it is seen as a defensive stock, Maley said. With big money shifting away from names like Facebook, Inc. (NASDAQ: FB) and Netflix, Inc. (NASDAQ: NFLX), investors are looking for momentum plays in the market, the equity strategist siad.

Encouragingly, Verizon's stock is backed by a dividend yield of more than 4 percent — which Facebook and Netflix can't match.

Verizon, along with other defensive names across utilities, consumer staples and health care, has been a market leader in recent months, Maley said.

Defensive groups as a whole are outperforming the broader market since spring, which makes Verizon's stock attractive no matter how investors view it, Maley said. 

Price Action

Verizon shares were down 1.4 percent at $54.14 at the close Wednesday.

Related Links:

'Convergence' Is Key: Credit Suisse Weighs In On The Telecom And Media Sector

Goldman Sachs Updates Its Telecom Outlook: 'The Pipes Are Not Broken'

Public domain photo via Wikimedia. 


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Posted-In: CNBC Defensive Stocks Matt Maley Miller Tabak telecom Trading NationMedia Best of Benzinga