Verizons moat - investing in stocks
Date Issued:April 29th 2009 Stock Info ZoneAs far as larger cap stocks go value investors agree that one of the most important things that a large cap company can have is a moat. A moat as talked about on this site is how hard a company is to compete with compared to other companies in the market. I think one of the best long term investments in large cap companies and cellular companies right now is “Verizon”. Why? Verizon is a trusted cellular company that is very hard to compete with because they own use or control most the cell towers in most parts of the U.S. hence Verizons moat is huge. Verizon also has a lot of product development in the sense that they always are creating new phones or popular things that are either on the phone or with the phones. Verizon does have competition from local cell companies in certain states and from the newly arriving T-Mobile which is a German company. I think in terms of what most want nothing can be as competitive as Verizon except for possibly T-Mobile but even they are stated by many to be way behind in coverage and services provided to customers (depending on what the customer wants). As far as the fundamentals of Verizon go, Verizon pays a nice dividend as of the date of this article i.e. about 6%, and they were cheaper in price then mot securities that are out there in terms of value and investing in stocks. It’s hard to find good stocks in the market but it’s always important to remember to invest in companies that you are almost certain to get some return off of instead of taking even a small chance of getting no return on riskier investments. Take what you almost certainly know that you can get a return off of over taking a big risk for a potential big gain. I think that Verizon in the lower 30 dollar range is a good buy for the long term and even at higher prices will continue to excel in value for the years to come. As with any company however it’s important to keep track of the competition that they have so as to note any company that can change the way the cellular market does business. The fact that they pay so much of their earnings as a dividend shows that it’s not necessary for them to be spending a lot of money on company development. Companies that constantly have to pay money to help the company survive is always a bad sign; it appears at this point that Verizon is not worrying so much on survival but rather to simply give their shareholders a nice return on their investment thanks to Verizons moat.
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