This week, five of the portfolio holdings ranked in the Top 10: FMCB, MDT, PPG, SJW, and TGT.
| Ticker | Account Value |
| FMCB | 2,877.00 |
| MDT | 2,030.40 |
| PPG | 2,325.60 |
| SJW | 2,020.28 |
| TGT | 2,304.64 |
But guess what? None of the above matters because it is time to add a new position to the Portfolio for the Ages!
I implore you to read my previous post on closing out the position in TDS. This portfolio move leaves the portfolio with no stocks in the Communication Services sector. That is a sector imbalance that leaves Communication Services as the only eligible sector for investment at this time. As luck would have it, there were two from that sector that made this week’s Top 10 and the one I am going with is no stranger.
Verizon Communications Inc.
Here is the profile from Yahoo! Finance:
Verizon Communications Inc., through its subsidiaries, engages in the provision of communications, technology, information, and entertainment products and services to consumers, businesses, and governmental entities worldwide. It operates in two segments, Verizon Consumer Group (Consumer) and Verizon Business Group (Business). The Consumer segment provides wireless services across the wireless networks in the United States under the Verizon and TracFone brands and through wholesale and other arrangements; and fixed wireless access (FWA) broadband through its wireless networks, as well as related equipment and devices, such as smartphones, tablets, smart watches, and other wireless-enabled connected devices. The segment also offers wireline services in the Mid-Atlantic and Northeastern United States, as well as Washington D.C. through its fiber-optic network, Verizon Fios product portfolio, and a copper-based network. The Business segment provides wireless and wireline communications services and products, including FWA broadband, data, video and conferencing, corporate networking, security and managed network, local and long-distance voice, and network access services to deliver various IoT services and products to businesses, government customers, and wireless and wireline carriers in the United States and internationally. The company was formerly known as Bell Atlantic Corporation and changed its name to Verizon Communications Inc. in June 2000. Verizon Communications Inc. was incorporated in 1983 and is headquartered in New York, New York.
The Details
Data as of 2024-08-17
| Name | Verizon Communications Inc. |
| Ticker | VZ |
| Website | Investor Relations |
| Sector | Communication Services |
| Dividend Streak | 17 years |
| Last Price | $40.61 |
| Div Amt (quarterly) | $0.665 |
| Ann Dividend | $2.66 |
| Last Ann Div Inc | 1.9% |
| Dividend Yield | 6.6% |
| Payout Ratio (ttm) | 57.8% |
| Beta (5-yr, mon) | 0.41 |
| P/E Ratio (ttm) | 8.83 |
| Margin of Safety | 25.6% |
Reasons to Invest
First, with the sale of TDS, the Portfolio of the Ages has zero exposure to the Communication Services sector. A position in VZ will solve that problem.
Second, the 6.6% dividend yield is substantial and will make up rather nicely for TDS’s dividend reduction. It looks to be reasonably safe as well.
Third, with the P/E Ratio under 9, VZ is trading at a discount. Behind the scenes, they have gradually reduced debt and increased cash flow, two good signs that earnings should pick up from here.
I don’t expect VZ to set the world on fire, but I do think scale matters in this industry. TDS, and their (soon to be sold off) controlling interest in USCellular [USM], is an example of how difficult it is to thrive in this industry. VZ has seen flat revenue for a decade, but they generate large amounts of cash, and probably should be trading north of $50.
VZ last traded at $40.61 per share. The proceeds from the complete closeout of the TDS position should amount to somewhere around $6,923.40. That amount plus the weekly $250+ means I will be placing a market order to buy 177 shares of VZ on Monday.