Verizon Communications (VZ) $40

Industry/Sector/Type - Telecom/cyclical

A typical telecom cyclical, Verizon is a “value” stock known for its consistent dividend, which at this price now yields 6.9%.

Verizon’s revenues in the past 10 years stayed between $132-$136Bn and similarly growth for the next 5 years is also forecasted between 1-2% per year, while earnings are supposed to grow 1 to 3%. VZ is priced at 8x earnings, so it is not relatively cheaper than its historical benchmarks.

As a cyclical the stock price hasn’t gone anywhere, the past 5 years it returned a negative 33% and was flat this year. The only way to make money from VZ or most cyclicals is to catch it at market bottoms or economic cycle bottoms, which are difficult to predict and in VZ’s case its low was in Oct 2023 at $31. Given how well the market has done it would have been a relative underperformance even if you caught it at the bottom.

Otherwise the only return is the dividend, which it has missed only once in 25 years, and grown consistently year over year.

Biggest catalyst for the stock - The dividend looks safe, so as long as the price stays stable a lot of income investors will like the almost 7% yield and return from the dividend.