Verizon Communications Inc
NYSE:VZ

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Verizon Communications Inc
NYSE:VZ
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Price: 40.23 USD -0.72% Market Closed
Market Cap: 169.6B USD

Verizon Communications Inc
Narrow Economic Moat

No Moat
Narrow
Wide
What is Economic Moat?

Verizon Communications Inc holds a narrow economic moat due to its high switching costs, network effects, intangible assets, and efficient scale in the telecommunications market. These factors provide some protection against competitors and contribute to sustaining its profitability.

Verizon Communications Inc
Competitive Advantages

Efficient scale

Verizon operates in a market that supports a limited number of participants, allowing it to capitalize on efficient scale in its infrastructure investments and market presence, limiting the threat of new entrants.

High switching costs

Verizon customers face significant obstacles in switching due to long-term contracts, bundling of services, and the inconvenience of changing providers, all of which lock them into Verizon's services.

Intangible assets

Verizon possesses intangible assets such as its strong brand identity and telecommunications licenses, which create barriers for new entrants and help maintain customer trust and loyalty.

Network effects

Verizon benefits from network effects because the quality and coverage of its telecommunications network improve as more users subscribe, making its service more valuable to its existing and potential customers.

Wide Economic Moat Companies

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Verizon Communications Inc
Glance View

Verizon Communications Inc. stands as a cornerstone in the telecommunications industry, a company that, since its inception in 2000, has become synonymous with innovation and reliability. Born from the merger of Bell Atlantic and GTE, Verizon has woven itself deeply into the fabric of American connectivity. The company's DNA is steeped in the rich history of the Baby Bells, and its operational scope spans across wireless communications, broadband, and fiber services. Verizon's robust network, widely recognized as one of the most reliable in the nation, serves as the backbone for modern communication —a necessity in today's digital age where connectivity is pivotal. Its operations are divided into major segments: Verizon Consumer Group, which caters to the individual consumer with wireless, residential, and small business segments, and Verizon Business Group, focusing on enterprise solutions that include strategic services and Internet of Things (IoT) applications. Verizon’s revenue model is a mosaic of subscription-based income and service fees, a strategy that allows for steady cash flow even in shifting economic landscapes. Key to its profitability is the extensive infrastructure that supports its wireless network, driving customer loyalty through service quality and coverage. The company has invested heavily in 5G technology, aiming to capture the accelerating demand for faster, more reliable digital experiences. Verizon leverages its core competencies to partner with tech giants, fostering an ecosystem that promises growth in areas like cloud computing, media delivery, and beyond. With its strong brand value and strategic focus on next-generation networks, Verizon aligns its goals with the increasing pace of technological adoption, laying a foundation for sustainable growth while navigating the complex telecommunication terrain.

VZ Intrinsic Value
61.4 USD
Undervaluation 34%
Intrinsic Value
Price
The Power of Economic Moat

Our research into Economic Moat performance spans the past 10 years and focuses on companies with a wide economic moat. For this analysis, we calculated the average stock price returns of these companies, comparing them to the performance of the S&P 500 index over the same period.

The results were compelling: wide moat stocks achieved a remarkable +645% average return, compared to +188% for the broader market. This difference highlights the long-term benefits of investing in businesses that can maintain their market position and pricing power over time.

Note: This research does not account for survivorship bias. Past performance is not indicative of future results.

The Power of
Economic Moat
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