Verizon Communications Inc. (VZ) Two-Stage Dividend Discount Model - Discounting Cash Flows
VZ
Verizon Communications Inc.
VZ (NYSE)

Estimated Value

USD

Market Price USD

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Two-Stage Dividend Discount Model

Used to estimate the value of companies based on two stages of growth. An initial period of high growth, calculated using [Sum of Discounted Dividends], followed by a period of stable growth, calculated using [Discounted Terminal Value].

Read more: GitHub Documentation

Interactive Assumptions

Discount Rate

Discount Rate

Discount Rate = Cost of Equity = Risk Free Rate + Beta * Market Premium

The cost of equity is the theoretical rate of return that an equity investment should generate. It is calculated using the CAPM formula.

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↳ Beta

Beta

Beta is a value that measures the price fluctuations (volatility) of a stock with respect to fluctuations in the overall stock market.

↳ Risk Free Rate

Risk-Free Rate

The risk-free rate represents the interest an investor would expect from an absolutely risk-free investment over a specified period of time. By default, it is equal to the current yield of the U.S. 10 Year Treasury Bond.

↳ Market Premium

Market Premium

Market risk premium represents the excess returns over the risk-free rate that investors expect for taking on the incremental risks connected to the equities market.

High Growth Years

High Growth Years

The estimated number of years during which the company is expected to experience high growth. After this period, the company will transition to a stable growth phase.

Historical Years

Historical Years

The number of historical years used to calculate averages for historical data.

High Growth Rate

High Growth Rate

The estimated growth rate of Earnings Per Share (EPS) during the high-growth phase.

High Growth Payout

High Growth Payout

The estimated dividend payout rate expressed as a percentage of Earnings Per Share (EPS) during the high-growth phase.

Stable Growth In Perpetuity

Stable Growth in Perpetuity

The estimated stable rate at which the company's Earnings Per Share (EPS) will grow in perpetuity after the last projected period.

Stable Payout

Stable Payout

The estimated dividend payout rate expressed as a percentage of Earnings Per Share (EPS) after the last projected period.

Results

Sum of discounted dividends 10.54 USD
Discounted terminal value 190.1 USD
Terminal value 253.7 USD
Dividend in stable phase 4.17 USD
EPS in stable phase 4.64 USD
Average historical Dividend Growth Rate 2.17%
Average historical Payout Ratio 58.77%
Average historical Return on Equity 51.67%

Historical and Projected Dividends

Monetary values are in USD

Edit Chart Values 2025 2026 2027 2028 2029

amounts of USD except for #

2024 LTM 2025 2026 2027 2028 2029
Earnings Per Share 4.15 4.22 4.08 4.17 4.26 4.35 4.45
Dividend per Share 2.67 2.71 2.4 2.45 2.5 2.56 2.61
Dividend Growth Rate 1.91% 1.5% -10.18% 2.17% 2.17% 2.17% 2.17%
Discounted Dividend 2.67 2.71 2.26 2.18 2.11 2.03 1.96

amounts of USD except for #

Average LTM 2024 2023 2022 2021 2020 2019 2018 2017 2016 2015
Net Income 18,539 17,783 17,506 11,614 21,256 22,065 17,801 19,265 15,528 30,101 13,127 17,879
Equity 66,341 100,722 99,237 92,430 91,144 81,790 67,842 61,395 53,145 43,096 22,524 16,428
Return on Equity 51.66% 17.92% 18.94% 12.74% 25.99% 32.52% 28.99% 36.25% 36.03% 133.6% 79.91% 145.4%
Common Dividends 10,252 11,442 11,262 11,033 10,799 10,453 10,226 10,014 9,783 9,475 9,262 9,028
Payout Ratio 58.77% 64.22% 64.34% 94.93% 50.79% 47.37% 57.44% 51.93% 63.03% 31.48% 70.5% 50.46%
Shares Outstanding 4,151 4,222 4,218 4,211 4,202 4,148 4,140 4,138 4,128 4,084 4,080 4,085
Reference Market Price 49.23 43.59 39.99 37.7 39.4 51.96 58.75 61.4 56.22 52.93 53.38 46.22
EPS 4.47 4.22 4.15 2.76 5.06 5.32 4.3 4.66 3.76 7.37 3.22 4.38
Dividend per Share 2.47 2.71 2.67 2.62 2.57 2.52 2.47 2.42 2.37 2.32 2.27 2.21
Dividend Growth Rate 2.17% 1.5% 1.91% 1.95% 1.98% 2.02% 2.07% 2.11% 2.15% 2.2% 2.71% 3.27%
Dividend Yield 5.18% 6.22% 6.68% 6.95% 6.52% 4.85% 4.2% 3.94% 4.22% 4.38% 4.25% 4.78%
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Discounting Cash Flows

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