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Verizon Communications Forward Rate of Return (Yacktman) %

: 5.34% (As of Jun. 2022)
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Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. Verizon Communications's forward rate of return for was 5.34%.

The historical rank and industry rank for Verizon Communications's Forward Rate of Return (Yacktman) % or its related term are showing as below:

VZ' s Forward Rate of Return (Yacktman) % Range Over the Past 10 Years
Min: -1.62   Med: 6.14   Max: 22.87
Current: 5.76

During the past 13 years, Verizon Communications's highest Forward Rate of Return was 22.87. The lowest was -1.62. And the median was 6.14.

VZ's Forward Rate of Return (Yacktman) % is ranked worse than
71.79% of 273 companies
in the Telecommunication Services industry
Industry Median: 11.42 vs VZ: 5.76

Unlike the Earnings Yield %, the Forward Rate of Return uses the normalized Free Cash Flow of the past seven years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.


Verizon Communications Forward Rate of Return (Yacktman) % Historical Data

The historical data trend for Verizon Communications's Forward Rate of Return (Yacktman) % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Verizon Communications Annual Data
Trend Dec12 Dec13 Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21
Forward Rate of Return (Yacktman) %
Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 2.37 -1.47 5.92 3.89 4.68

Verizon Communications Quarterly Data
Sep17 Dec17 Mar18 Jun18 Sep18 Dec18 Mar19 Jun19 Sep19 Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22
Forward Rate of Return (Yacktman) % Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 2.84 3.95 4.68 4.93 5.34

Competitive Comparison

For the Telecom Services subindustry, Verizon Communications's Forward Rate of Return (Yacktman) %, along with its competitors' market caps and Forward Rate of Return (Yacktman) % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

   

Verizon Communications Forward Rate of Return (Yacktman) % Distribution

For the Telecommunication Services industry and Communication Services sector, Verizon Communications's Forward Rate of Return (Yacktman) % distribution charts can be found below:

* The bar in red indicates where Verizon Communications's Forward Rate of Return (Yacktman) % falls into.



Verizon Communications Forward Rate of Return (Yacktman) % Calculation

Forward Rate of Return is a concept that Don Yacktman uses in his investment approach. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. He said in the interview (March 2012, when the S&P 500 was at about 1400):

If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.

The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).

Verizon Communications's Forward Rate of Return of Jun. 2022 is

Forward Rate of Return=Normalized Free Cash Flow/Price+5-Year EBITDA Growth Rate
=1.73904762/50.75+0.0191
=5.34 %

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


Verizon Communications  (NYSE:VZ) Forward Rate of Return (Yacktman) % Explanation

Unlike the Earnings Yield, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.

For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over five years. The reason we use five years is to make it comparable to the growth rate.


Be Aware

In the Forward Rate of Return calculation, the growth rate is added directly to today's free cash flow yield. Therefore the calculation is reliable only if the company can grow at the same rate in the future as it did in the past. Investors should pay close attention to this when researching growth stocks. A more accurate measurement for return is Return on Capital.


Verizon Communications Forward Rate of Return (Yacktman) % Related Terms

Thank you for viewing the detailed overview of Verizon Communications's Forward Rate of Return (Yacktman) % provided by GuruFocus.com. Please click on the following links to see related term pages.


Verizon Communications Business Description

Verizon Communications logo
Address
1095 Avenue of the Americas, New York, NY, USA, 10036
Verizon is now primarily a wireless business (more than 70% of revenue and nearly all operating income). It serves about 91 million postpaid and 4 million prepaid phone customers and connects another 25 million data devices, like tablets, via its nationwide network, making it the largest U.S. wireless carrier. The firm has agreed to acquire Tracfone, a wireless reseller that serves about 20 million prepaid customers in the U.S., from America Movil. Fixed-line telecom operations include local networks (12% of revenue) in the Northeast, which reach about 25 million homes and businesses, and nationwide enterprise services (10%). Verizon Media Group, the online media and advertising firm formed with the acquisitions of AOL and Yahoo, provides the remainder of revenue.
Executives
Brouillette Manon officer: EVP and Group CEO-VZ Consumer 40 AVENUE SPRINGGROVE MONTREAL Z4 H3C 4M8
Hammock Samantha officer: EVP & Chief HR Officer 1095 AVENUE OF THE AMERICAS NEW YORK NY 10036
Tome Carol B director 55 GLENLAKE PARKWAY, NE ATLANTA GA 30328
Narasimhan Laxman director PEPSICO, INC., 700 ANDERSON HILL ROAD PURCHASE NY 10577
Slater Rodney E director
Bertolini Mark T director AETNA INC. 151 FARMINGTON AVENUE HARTFORD CT 06156
Otis Clarence Jr director 1095 AVENUE OF THE AMERICAS NEW YORK NY 10036
Archambeau Shellye L director 1095 AVENUE OF THE AMERICAS, 8TH FLOOR NEW YORK NY 10036
Austin Roxanne S director 200 N SEPULVEDA BLVD PO BOX 956 MS ES/001/A102 EL SEGUNDO CA 90245
Healey Melanie director VERIZON COMMUNICATIONS INC. 1095 AVENUE OF THE AMERICAS NEW YORK NY 10036
Weaver Gregory G. director 1095 AVENUE OF THE AMERICAS NEW YORK NY 10036
Schulman Daniel H director C/O PAYPAL HOLDINGS, INC. 2211 NORTH FIRST STREET SAN JOSE CA 95131
Qureshi Rima officer: EVP & Chief Strategy Officer 2000 PURCHASE STREET PURCHASE NY 10577
Gowrappan Kumara Guru officer: EVP and Group CEO-VZ Media 1095 AVENUE OF THE AMERICAS NEW YORK NY 10036
Dunne Ronan officer: EVP and Group CEO-VZ Consumer 1095 AVENUE OF THE AMERICAS NEW YORK NY 10036

Verizon Communications Headlines

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