Latest News

How to Buy Verizon and Its 7.5% Dividend Yield With Low Risk

0

Verizon stock is hitting 52-week lows on Friday after disappointing earnings. But for the bulls, a low-risk long setup may be near.

Author:

Bret Kenwell

Publish date:

Oct 21, 2022 4:14 PM EDT

Shares of Verizon are not seeing the reaction to its earnings report that AT&T  (T)  did when the latter rallied more than 10% at one point on Thursday.

Verizon  (VZ)  shares instead are moving lower on Friday, falling about 5% after its disappointing quarter.

Earnings fell 7% year over year to $1.32 a share, missing expectations of $1.29 a share. Revenue climbed 4% and barely topped expectations. The company’s post-paid additions missed estimates, too.

On the plus side, the company reiterated its full-year earnings outlook, but that’s not quite as good as the top- and bottom-line beat and raised guidance that AT&T delivered yesterday.

As a result, Verizon shares are now hitting 52-week lows. That’s despite a dividend yield that has swelled to roughly 7.5%.

Of course, it doesn’t help that AT&T just reported good results — making it potentially more attractive to telecom investors, even as it pays a 6.5% dividend yield.

Daily chart of Verizon stock.Chart courtesy of TrendSpider.com

On the charts Verizon has some constructive price action even as it hits a one-year low. That’s not often the case.

Verizon stock dipped below the prior 2022 low of $35.04, hit $34.55 and then reclaimed $35.04.

Look at it this way: The stock broke to a new low, then reclaimed the prior low. That’s known as a reversal and it could have bullish traders long Verizon if it can close back above $35.04.

They would likely use a stop-loss just below the new low. And they’d look for a gap-fill at $36.55 and a test of the declining 10-day.

Above that puts $38 and the 21-day in play.

On the downside, to be sure, a break and close below $34.55 opens more downside for Verizon stock.

I’m not sure that Verizon would fall this far, but it could open the door for a dip down to the low $30s, where we find the 78.6% retracement as measured from the 2019 high to the 2008 low.

The bottom line: Keep an eye on $35.04; it’s the key pivot in the short term. 

New IRS tax brackets and standard deduction could save families hundreds or even thousands of dollars. Now the bad news.

Previous article

Another Big Rate Hike Is Coming. Why the Stock Market Rallied.

Next article

You may also like

Comments

Leave a reply

Your email address will not be published. Required fields are marked *

More in Latest News