Ten-Year Tally: VZ Hands Back $102 Bil to Shareholders
In the last decade, Verizon Communications (VZ) has returned an impressive $102 Bil back to its shareholders through cold, hard cash via dividends and buybacks. Let’s look at some numbers and compare how this payout power stacks up against the market’s biggest capital-return machines.
As it turns out, VZ has returned the 18th highest amount to shareholders in history.
| VZ | S&P Median | |
|---|---|---|
| Dividends | $102 Bil | $4.5 Bil |
| Share Repurchase | $60 Mil | $5.5 Bil |
| Total Returned | $102 Bil | $9.1 Bil |
| Total Returned as % of Current Market Cap | 55.3% | 25.2% |
Why should you care? Because dividends and share repurchases represent direct, tangible returns of capital to shareholders. They also signal management’s confidence in the company’s financial health and ability to generate sustainable cash flows. And there are more companies like that. Here is a list of the top 10 companies ranked by total capital returned to shareholders via dividends and stock repurchases.
Top 10 Companies By Total Shareholder Return
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| Total Money Returned | As % Of Current Market Cap | via Dividends | via Share Repurchases | |
|---|---|---|---|---|
| AAPL | $847 Bil | 22.3% | $141 Bil | $706 Bil |
| MSFT | $364 Bil | 9.5% | $165 Bil | $199 Bil |
| GOOGL | $343 Bil | 11.6% | $12 Bil | $331 Bil |
| XOM | $212 Bil | 43.4% | $145 Bil | $67 Bil |
| WFC | $208 Bil | 76.8% | $59 Bil | $150 Bil |
| META | $178 Bil | 9.6% | $7.7 Bil | $171 Bil |
| JPM | $174 Bil | 19.8% | $0.0 | $174 Bil |
| ORCL | $163 Bil | 20.6% | $34 Bil | $129 Bil |
| JNJ | $157 Bil | 35.1% | $104 Bil | $52 Bil |
| CVX | $153 Bil | 57.2% | $97 Bil | $55 Bil |
For full ranking, visit Buybacks & Dividends Ranking
What do you notice here? The total capital returned to shareholders as a % of the current market cap appears inversely proportional to growth prospects for reinvestments. Companies like META and MSFT are growing much faster, in a more predictable way, compared to the others, but they have returned a much lower fraction of their market cap to shareholders.
That’s the flip side to high capital returns. Sure, they are attractive, but you have to ask yourself the question: Am I sacrificing growth and sound fundamentals? With that in mind, let’s look at some numbers for VZ. (see Buy or Sell VZ Stock for more details)
VZ Fundamentals
- Revenue Growth: 2.1% LTM and 0.7% last 3-year average.
- Cash Generation: Nearly 14.3% free cash flow margin and 21.5% operating margin LTM.
- Recent Revenue Shocks: The minimum annual revenue growth in the last 3 years for VZ was -0.6%.
- Valuation: VZ trades at a P/E multiple of 10.2
- Opportunity vs S&P: Compared to S&P, you get lower valuation, lower revenue growth, and better margins
| VZ | S&P Median | |
|---|---|---|
| Sector | Communication Services | – |
| Industry | Integrated Telecommunication Services | – |
| PE Ratio | 10.2 | 23.9 |
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| LTM* Revenue Growth | 2.1% | 5.2% |
| 3Y Average Annual Revenue Growth | 0.7% | 5.3% |
| Min Annual Revenue Growth Last 3Y | -0.6% | -0.1% |
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| LTM* Operating Margin | 21.5% | 18.6% |
| 3Y Average Operating Margin | 21.8% | 17.8% |
| LTM* Free Cash Flow Margin | 14.3% | 13.3% |
*LTM: Last Twelve Months
That’s a good overview, but evaluating a stock from an investment perspective involves much more. That is exactly what Trefis High Quality Portfolio does. It is designed to reduce stock-specific risk while giving upside exposure.
VZ Historical Risk
That said, Verizon isn’t immune to big hits. It fell about 40% in the Dot-Com crash and dipped nearly 43% during the Global Financial Crisis. The 2018 correction and Covid sell-off were milder, with drops around 18%, but still notable. Even the recent inflation shock slammed it by just over 40%. So while Verizon has solid fundamentals, it still takes a sizable hit when markets turn sour.
The Trefis High Quality (HQ) Portfolio, with a collection of 30 stocks, has a track record of comfortably outperforming its benchmark that includes all 3 – the S&P 500, S&P mid-cap, and Russell 2000 indices. Why is that? As a group, HQ Portfolio stocks provided better returns with less risk versus the benchmark index; less of a roller-coaster ride, as evident in HQ Portfolio performance metrics.