FYBR dividend yield calculator – Verizon’s Frontier Communications Acquisition Raises Dividend Risk Profile, Affects VZ Stock’s Dividends

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Frontier Communications Parent ($NASDAQ:FYBR) is a major telecommunications company in the United States, providing a variety of services such as internet, phone, and television to both residential and business customers. Recently, the company has been in the news due to its acquisition by Verizon, one of the largest telecommunications companies in the world. Verizon’s decision to acquire Frontier Communications has significantly increased the dividend risk profile for the company. This means that there is now a greater possibility of the dividend being reduced or eliminated altogether. This has caused investors to question the strategic reasoning behind the acquisition and its potential impact on their returns. One of the main reasons for this increase in dividend risk is the significant debt burden that Verizon will now take on due to the acquisition. The company plans to finance the deal through a combination of cash and debt, which could strain its financial resources. This could potentially lead to a reduction in cash flow available for dividend payments.

Furthermore, Frontier Communications has been struggling financially for several years, with declining revenues and increasing debt. By acquiring the company, Verizon is taking on this burden and may need to divert its resources towards improving Frontier’s financials instead of focusing on its own growth and dividend payouts. It is also worth noting that Verizon’s decision to acquire Frontier Communications comes at a time when the telecommunications industry is facing significant disruption. With the rise of streaming services and increasing competition from new players, traditional telecommunications companies are facing challenges in maintaining their market share and profitability. This adds another layer of uncertainty to the potential impact of this acquisition on VZ stock’s dividends. While the deal may have strategic benefits in terms of expanding Verizon’s reach and customer base, it also brings potential risks for investors. It remains to be seen how this acquisition will ultimately affect VZ stock’s dividends, but investors should pay close attention to any developments in the coming months.

Price History

Verizon’s recent announcement of their acquisition of Frontier Communications has caused a ripple effect in the stock market. As a result, shareholders and investors are left wondering how this will impact Verizon’s dividend payouts and overall dividend risk profile. On Friday, the day of the announcement, FRONTIER COMMUNICATIONS PARENT stock opened at $35.07 and closed at $35.53, showing a modest increase of 1.51% from the previous day’s closing price of $35. This indicates that investors have reacted positively to the acquisition news, at least in the short term.

However, beyond the initial market reaction, there are concerns about the impact on Verizon’s dividend payouts. Verizon is known for its consistent and stable dividend payments, making it a popular choice for investors seeking steady income. With the acquisition of Frontier Communications, it is expected that Verizon will take on a larger debt load, potentially affecting their ability to sustain their current dividend policy. Furthermore, with the addition of Frontier Communications’ operations, Verizon will now have a larger exposure to the declining landline business. This could potentially impact their overall cash flow, which in turn could affect their ability to maintain or increase dividend payments in the future. The uncertainty surrounding how this acquisition will affect Verizon’s dividend policy has led to a slight increase in the company’s dividend risk profile. This means that there is now a higher chance that Verizon may need to cut or reduce their dividend payments due to increased financial obligations. In conclusion, while the immediate market response to the Verizon-Frontier acquisition may be positive, there are potential risks for Verizon’s dividend payouts in the long run. Investors should keep a close eye on any updates or changes in Verizon’s dividend policy as a result of this acquisition. Live Quote…

About the Company

Income Snapshot

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Cash Flow Snapshot

Below shows the cash from operations, investing and financing for FYBR. More…

Balance Sheet Snapshot

Below shows the total assets, liabilities and book value per share for FYBR. More…

Key Ratios Snapshot

Some of the financial key ratios for FYBR are shown below. More…

Analysis – FYBR Stock Fair Value

After conducting a thorough analysis of FRONTIER COMMUNICATIONS PARENT’s fundamentals, I have come to the conclusion that the fair value of their share is around $23.3. This calculation was done using our proprietary Valuation Line, which takes into consideration various financial factors such as revenue, earnings, and cash flow. However, I have noticed that currently, FRONTIER COMMUNICATIONS PARENT stock is trading at $35.53, which indicates an overvaluation of 52.6%. This means that the stock is currently trading at a higher price than what it is actually worth based on its fundamentals. As an investor, this overvaluation should be taken into consideration before making any decisions regarding FRONTIER COMMUNICATIONS PARENT stock. It is important to carefully evaluate the stock’s financial performance and future prospects before investing, as an overvalued stock may not yield the desired returns. In conclusion, while FRONTIER COMMUNICATIONS PARENT may seem like a promising investment opportunity, it is important to keep in mind that the stock is currently overvalued and may not be a wise choice for investment at its current price. It would be prudent to wait for the stock’s price to align more closely with its fair value before considering investing in it. More…

Peers

It is a popular choice for internet, TV, and phone services, as well as providing customers with access to cutting-edge technology and features. While Frontier Communications Parent Inc is the largest provider in the field, there are other notable competitors such as Liberty Broadband Corp, LICT Corp, and Shenandoah Telecommunications Co which provide similar services and strive to keep up with the latest trends.

– Liberty Broadband Corp ($NASDAQ:LBRDA)

Liberty Broadband Corp is a large American telecommunications and entertainment company. It provides cable television, internet, voice and data services to consumers and businesses in the US, Canada and Caribbean. The company has a market cap of 13.47B as of 2022, which reflects its strong financial position and strong brand recognition. Liberty Broadband Corp’s return on equity (ROE) is 13.57%, which is higher than the industry average. This indicates that the company is able to generate high returns on its equity investments, making it an attractive investment for shareholders.

– LICT Corp ($OTCPK:LICT)

LICT Corp is a publicly-traded company that specializes in providing telecommunications, internet and IT services. As of 2022, the company has a market cap of 354.77M, indicating its overall size and value in the market. Additionally, its Return on Equity of 16.26% demonstrates that the company is able to effectively reinvest its profits and generate value for its shareholders.

– Shenandoah Telecommunications Co ($NASDAQ:SHEN)

Shenandoah Telecommunications Co is a publicly traded and diversified telecommunications holding company that provides a broad range of services to customers in the Mid-Atlantic and Midwestern United States. As of 2022, the company has a market capitalization of 904.27 million dollars and a return on equity of -0.14%. Market capitalization is a measure of a company’s total value, calculated by multiplying its stock price by the total number of outstanding shares. Return on equity is a measure of how well a company uses its capital to generate profits; it is calculated by dividing net income by shareholders’ equity. The negative return on equity indicates that Shenandoah Telecommunications Co is not efficiently utilizing its capital to generate returns for its shareholders.

Summary

Verizon’s recent acquisition of Frontier Communications has raised concerns about the company’s dividend risk profile. This is due to the fact that Frontier had a high debt burden and had already reduced its dividend payments prior to the acquisition. This move may result in a decrease in Verizon’s cash flow, making it difficult for the company to maintain its current dividend payout ratio.

Additionally, the integration of Frontier’s operations into Verizon’s may lead to additional expenses and potential challenges, further impacting the company’s dividend stability. Investors should closely monitor Verizon’s financial performance and management’s decisions regarding dividend payments in light of this acquisition.