Boston, MA 05/19/2014 (wallstreetpr) – The dividend paying telecom company Verizon Communications Inc. (NYSE:VZ) was among the promising stocks acquired by billionaire investor Warren Buffet in the first quarter, Berkshire Hathaway Inc (NYSE:BRK.A), Mr. Buffet’s Investment vehicle, disclosed in a regulatory filing.
Berkshire had 11 million shares of Verizon by end of March. Therefore, Mr. Buffet’s investment in the telecom giant is valued at about $530 million.
Mr. Buffet’s stake in Verizon Communications Inc. (NYSE:VZ) seems to be informed by the positive prospects that the telecom company provides especially after buying out its partner Vodafone out Verizon Wireless. Verizon offered $130 billion to Vodafone in February to eliminate the stake of the latter in Verizon Wireless, a business that seems to be having many prospects in the U.S. despite the fact that the market has already seen widespread smartphone penetration.
According to the S&P 500 Index, Verizon Communications Inc. (NYSE:VZ) is ranked at position 24 among the highest dividend payers. The company has a dividend yield of 4.4 percent. With its dividend payout practice and simple business nature, Verizon fits the investment criteria of Mr. Buffet and by extension many other institutional and retail investors.
Financial performance
Verizon released its 1Q2014 financial scorecard on April 24. The company had earnings per share of $0.84 for the quarter, which was below the consensus estimate of $0.87 per share. While EPS faltered in view of Wall Street estimates, revenue was up at $31.82 billion for the quarter against the consensus estimate of $30.70 billion. The company had EPS of $0.68 in 1Q2013 while the latest revenue figure was up 4.8 percent over the same quarter a year earlier.
In the past 10 years, Verizon saw its earnings grow by an average of 4.6 percent on an annual basis.
Share of the telecom giant traded at an average of $47.92 in 1Q. The shares are up 3.09 percent over the past one month and down 0.14 percent year-to-date.
In addition to Verizon
At the end of March, in addition to Verizon Communications Inc. (NYSE:VZ), Berkshire had more than half of its $119 billion equity portfolio in four companies that included Coca-Cola Company (NYSE:KO), Wells Fargo & Co. (NYSE:WFC), International Business Machines Corp (NYSE:IBM) and American Express Company (NYSE:AXP).
