The Best and Worst Dow Stocks for the Next 12 Months

23. Verizon Communications Inc. (NYSE:VZ)

Upside Potential: 10.1%

Market Cap: $180 billion

Number of Hedge Fund Holders: 74

Verizon Communications Inc. (NYSE:VZ) is a telecommunications company that provides wireless and wireline communications services and products to consumers and businesses.

Verizon Communications Inc. (NYSE:VZ) commands around 37%- 38% of the market share in the US telecom industry, which is generally known for slow growth but strong cash flow generation. Despite this industry dynamic, VZ is trying to support user and average revenue per user (ARPU) growth through innovative offerings, including pricing and service bundles. Wireless service revenue, which constitutes around 56%-60% of its total revenue, grew 3.1% year-over-year in Q4 2024, and is expected to register a 2.0%-2.8% growth in FY 2025 as well.

The company operates on an EBITDA margin of around 34% and generated a robust free cash flow (FCF) of $19.8 billion in FY 2024, up from $18.7 billion in 2023. The momentum will continue in 2025 as the company expects to generate an FCF of $17.5-$18.5 billion, which should eventually help it maintain an already strong over 6% dividend yield. VZ’s financial position is strong, with net debt to EBITDA of 2.3 times, which is considered comfortable relative to the industry.

As per Mordor Intelligence, the US Telecom market size is expected to grow to USD 550 billion by 2030, from USD 459 billion in 2025 (CAGR of 3.67%). In its recently published 2025 global telecommunications outlook, Deloitte highlighted that telecom companies continuously seek innovative ways to diversify their revenue base. Thus, they could capitalize on opportunities like monetizing the GenAI demand, mergers and acquisitions, and profitable strategies to launch 6G. As the leading player, Verizon Communications Inc. (NYSE:VZ) should benefit from these opportunities and ensuing growth.