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Is Verizon Communications Inc. (VZ) Destined for Greatness?

Verizon is also promising to deploy voice-over-LTE, or VoLTE, which has been a long time coming and has seen numerous delays. The company had initially planned commercial deployment of VoLTE in 2012, but subsequently pushed it back to 2013. However, the company has recently announced that VoLTE wouldn’t launch until early 2014. If its history of delays is any indication, investors may not want to hold their breath for a 2014 roll-out, either.

Verizon’s potential buyout of Vodafone Group Plc (ADR) (NASDAQ:VOD)‘s stake in the companies’ joint wireless venture could make it difficult to accurately assess Verizon’s long-term outlook. Verizon has long been trying to resolve underlying control issues with the British telecom powerhouse, which owns a 45% stake in Verizon Wireless. There have even been talks of Verizon buying Vodafone Group Plc (ADR) (NASDAQ:VOD)’s stake outright in the world’s largest leveraged buyout. This would leapfrog Verizon over many competitors in the global telecom race, but at the price of adding a massive debt overhang to its already hefty debt commitments.

The U.S. mobile market appears to have peaked, as networks added only about 200,000 postpaid subscribers, and about 1 million no-contract customers in the first quarter. The market is effectively supersaturated with more than 300 million mobile subscriptions. Growing at this point means stealing market share from somebody else, but that doesn’t mean the end of stronger business in the sector, as service revenues increased by 14% year over year. Verizon and AT&T account for 70% of mobile sales, but only 66% of subscribers, so there is at least some pricing power left in having a leadership position.

Putting the pieces together
Today, Verizon has few of the qualities that make up a great stock, but no stock is truly perfect. Digging deeper can help you uncover the answers you need to make a great buy — or to stay away from a stock that’s going nowhere.

The article Is Verizon Destined for Greatness? originally appeared on Fool.com.

Fool contributor Alex Planes has no position in any stocks mentioned. The Motley Fool recommends Vodafone.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

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