One of the most successful companies in the mobile provider sector is stupid-cheap right now. And I would have to be an imbecile not to write about it and share this incredible opportunity with you.
This dividend blue-chip stock is trading at its lowest valuation since inception.
Today I’ll share with you the name of this company and show you why this dividend legend is 43% undervalued and could make you 90% returns in the next 1.5 years.
How You Can Score the Deal of a Lifetime on Verizon
The company I am talking about, is none other than Verizon (VZ).
And not only is Verizon trading at the lowest valuation ever, you can get a better deal on it than Mark Cuban gets when he invests in companies on Shark Tank.
Mark Cuban, a billionaire celebrity judge on Shark Tank, averages seven times earnings for his deals. And he usually gets sweetheart deals no one else can.
But right now, Verizon is trading at 6.9 times earnings. An even better deal and one that hasn’t yet been seen in the history of the company.
During the Pandemic, Verizon bottomed at seven times earnings. In the Great Recession, it only fell as low as 11 times earnings.
And to top off this incredible bargain price, never in history has Verizon had a higher yield. It currently yields a safe 8%.
Taking all this into consideration, I believe Verizon is 43% historically undervalued and one of the greatest bargain deals of 2023 thus far.
And if we look at its past rallies from bear market lows, you could easily make 90% returns in the next 1.5 years.
Verizon’s Best Rallies from Bear Market Lows
| Time Frame (Years) | Annual Returns | Total Returns |
| 1 | 77% | 77% |
| 3 | 35% | 148% |
| 5 | 25% | 208% |
| 7 | 22% | 293% |
| 10 | 17% | 401% |
| 15 | 19% | 1287% |
(Source: Portfolio Visualizer Premium)
Clearly, this red-hot Wall Street darling has the potential to deliver Buffett-like returns over the next few years.
But if you’re wondering, what’s the catch? Why is Wall Street being so generous with this once-in-a-lifetime opportunity? And – why is the company so undervalued?
Here’s the scoop…
Why Wall Street is Undervaluing Such a Great Company
One of the reasons investors are worried about Verizon is due to a recent article in the Wall Street Journal.
The article called into question whether or not the company was responsible for potential lead contamination coming from telephone cables that were installed back in the 1960s and 70s across America.
Investors are worried about potential mountainous legal costs similar to what the company 3M is now facing due to its earplugs not providing the protection they previously claimed and its long-lasting chemicals knowns as PFAS found contaminating drinking water.
But I find it hard to believe that Verizon, a company that was created in 2000, could be held responsible for lead cables installed in the 1960s and 70s before its existence. The real question will be whether or not they knew about potential contamination and did nothing about it later on.
In contrast, 3M has been found directly responsible for damages that occurred between 2003 and 2015 after claiming their products were safe and effective. In just one damning case, military members across the board have been found to suffer from tinnitus as a direct result of using 3M ear plugs.
Verizon has no such damning evidence to pin on it as of now. But Wall Street is already talking about the estimated $60 billion in legal bills that could occur if Verizon is found guilty.
In my humble opinion, we are putting the cart way before the horse, and undervaluing one of the best companies on the market.
Worst case scenario, Verizon is on the hook for $1 billion per year for the next 30 years. Verizon with an estimated $24 billion in annual free cash flow, can handle these costs with ease. That’s just 7% of this year’s free cash flow and 4% of estimated free cash flow in 2028 when its 5G investments are fully paying off.
The payout ratio in 2028 would go from a very safe 50% to a still very safe 55%.
But again, Verizon has not been found guilty in court and this is the overall worst-case scenario.
What we are really left with, is the deal of a lifetime.
Right now, you can get an even better deal than Mark Cuban brags about on Shark Tank when you buy Verizon.
And I wouldn’t be doing my job if I didn’t tell you about this once in a lifetime opportunity.
Safe Investing,
Adam Galas
Analyst, Intelligent Income Daily