Stock Analysis on Net

Verizon Communications Inc. (NYSE:VZ)

Enterprise Value to FCFF (EV/FCFF) 

Microsoft Excel

Free Cash Flow to The Firm (FCFF)

Verizon Communications Inc., FCFF calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Net income attributable to Verizon 11,614 21,256 22,065 17,801 19,265
Net income attributable to noncontrolling interests 481 492 553 547 523
Net noncash charges 25,647 15,849 17,811 23,364 22,671
Changes in current assets and liabilities, net of effects from acquisition/disposition of businesses (267) (456) (890) 56 (6,713)
Net cash provided by operating activities 37,475 37,141 39,539 41,768 35,746
Interest paid, net of amounts capitalized, net of tax1 3,121 2,550 2,642 3,386 4,101
Capitalized interest costs, net of tax2 1,294 1,561 1,416 425 571
Capital expenditures, including capitalized software (18,767) (23,087) (20,286) (18,192) (17,939)
Acquisitions of wireless licenses (5,796) (3,653) (47,596) (2,126) (898)
Right-of-use assets obtained in exchange for new finance lease liabilities (968) (832) (461) (562) (564)
Free cash flow to the firm (FCFF) 16,360 13,680 (24,747) 24,699 21,017

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Item Description The company
FCFF Free cash flow to the firm is the cash flow available to the Verizon Communications Inc. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made. Verizon Communications Inc. FCFF increased from 2021 to 2022 and from 2022 to 2023.

Interest Paid, Net of Tax

Verizon Communications Inc., interest paid, net of tax calculation

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Effective Income Tax Rate (EITR)
EITR1 28.80% 23.10% 23.10% 23.40% 13.00%
Interest Paid, Net of Tax
Interest paid, net of amounts capitalized, before tax 4,384 3,316 3,435 4,420 4,714
Less: Interest paid, net of amounts capitalized, tax2 1,263 766 793 1,034 613
Interest paid, net of amounts capitalized, net of tax 3,121 2,550 2,642 3,386 4,101
Interest Costs Capitalized, Net of Tax
Capitalized interest costs, before tax 1,818 2,030 1,841 555 656
Less: Capitalized interest costs, tax3 524 469 425 130 85
Capitalized interest costs, net of tax 1,294 1,561 1,416 425 571

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 See details »

2 2023 Calculation
Interest paid, net of amounts capitalized, tax = Interest paid, net of amounts capitalized × EITR
= 4,384 × 28.80% = 1,263

3 2023 Calculation
Capitalized interest costs, tax = Capitalized interest costs × EITR
= 1,818 × 28.80% = 524


Enterprise Value to FCFF Ratio, Current

Verizon Communications Inc., current EV/FCFF calculation, comparison to benchmarks

Microsoft Excel
Selected Financial Data (US$ in millions)
Enterprise value (EV) 316,005
Free cash flow to the firm (FCFF) 16,360
Valuation Ratio
EV/FCFF 19.32
Benchmarks
EV/FCFF, Competitors1
AT&T Inc. 9.90
T-Mobile US Inc. 28.48
EV/FCFF, Sector
Telecommunication Services 16.12
EV/FCFF, Industry
Communication Services 22.51

Based on: 10-K (reporting date: 2023-12-31).

1 Click competitor name to see calculations.

If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.


Enterprise Value to FCFF Ratio, Historical

Verizon Communications Inc., historical EV/FCFF calculation, comparison to benchmarks

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Selected Financial Data (US$ in millions)
Enterprise value (EV)1 316,972 317,390 373,185 342,126 351,042
Free cash flow to the firm (FCFF)2 16,360 13,680 (24,747) 24,699 21,017
Valuation Ratio
EV/FCFF3 19.38 23.20 13.85 16.70
Benchmarks
EV/FCFF, Competitors4
AT&T Inc. 9.83 11.93 10.67 10.84 12.30
T-Mobile US Inc. 28.48 218.70
EV/FCFF, Sector
Telecommunication Services 16.10 24.13 567.15 16.80 15.66
EV/FCFF, Industry
Communication Services 22.23 22.97 30.26 25.42 24.63

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1 See details »

2 See details »

3 2023 Calculation
EV/FCFF = EV ÷ FCFF
= 316,972 ÷ 16,360 = 19.38

4 Click competitor name to see calculations.