Is now a good time to invest in Verizon Wireless?
If you’re like most people, you probably didn’t give Verizon Wireless a whole lot of attention in 2019. The stock didn’t have any major drops this year, but it’s also only up 9% from the beginning of the year.
And most of the media attention went toward T-Mobile and Sprint’s embattled merger. Plus, there is the chance that Dish Network could be entering the telecommunications market very soon.
In comparison, there doesn’t seem to be a lot going on with Verizon. Analysts consider the stock a moderate buy, but overall, Wall Street is pretty lukewarm when it comes to the company.
But the fact that things have slowed for Verizon right now may indicate that it’s a good time to invest. Here are three things to watch for from Verizon Wireless in 2020.
1. Competition in the wireless industry will continue to increase
The wireless industry is incredibly competitive, and this will only increase in the coming years. Sprint and T-Mobile continue to go to battle in court over their $26 billion merger.
And now, several cable companies are offering their own wireless plans, adding more competition to the mix. For its part, Verizon did acquire Yahoo! and AOL, but these acquisitions did little to improve the company’s online presence.
2. Verizon boosted its subscriber base this year
Verizon got off to a slow start this year in terms of subscriber growth, but things did start to pick up during the second quarter. The company added 451,000 new subscribers during the second quarter and 61,000 subscribers during the third quarter.
Both of these figures beat Wall Street’s expectations. However, the company significantly increased its marketing and promotional efforts to make this happen.
3. Verizon is building out its 5G network
The biggest opportunity for Verizon is the transition from 4G LTE to 5G. This will provide much faster connection speeds for consumers.
Verizon is reportedly planning to spend up to $18 billion to build out its 5G network in the U.S. However, the company doesn’t expect 5G to meaningfully contribute to its revenue until 2021.
Overall, if you’re looking for a wireless telecommunications company to invest in, then Verizon may not be a bad bet. But given that the company continues to underperform the S&P 500, there are likely better investments to be found.