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Does iPhone Launch Help Verizon's High-Yield Shares?
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24/7 Wall St. Insights
- Verizon Communications Inc. (NYSE: VZ) has more market share than its rivals and so should benefit more from the release of the iPhone 16.
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Verizon Communications Inc. (NYSE: VZ) has the largest market share of wireless customers, at 38% of the U.S. market. T-Mobile US Inc. (NASDAQ: TMUS) and AT&T Inc. (NYSE: T) each have about 30%. In theory, Verizon should benefit more from the launch of the iPhone 16. A rise in revenue can be added to its position as one of the highest-yielding blue-chip companies. Verizon’s current yield is 6.4%.
Its stock has risen at about the same rate as the S&P 500, with an occasional small bounce due to earnings. In the past year, Verizon shares have been up 19%, while the S&P 500 has been 26% higher.
Verizon makes most of its revenue from subscribers and not equipment. In the most recent quarter, when revenue was flat at just over $32.5 billion, equipment sales were $5 billion. The bad news is that wireless equipment costs $5.5 billion. The company is losing money on smartphones and accessories to drive subscriber revenue.
Viewed through the lens of iPhone revenue, the Apple smartphone will not help Verizon become more profitable. The wireless customers that the iPhone will help it keep or gain are the key to the financials.
For $1,500 in Passive Income, Invest This Much in Verizon Stock
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