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Verizon Maintains Place as DJIA’s Worst Performing Stock for 2017
Verizon Communications Inc. (VZ) last week saw its share price dip by $1.24 (about 2.6%) to retain its position as the worst-performing stock among the 30 equities included in the Dow Jones Industrial Average. For the year to date, Verizon's shares are down 14.97%. General Electric Co. (GE) and Chevron Corp. (CVX) are both down by more than 10% as well, with GE down 12.75% and Chevron down 10.79% for the year to date.
According to a new report published by PC Magazine last week, Verizon's wireless network remains the country's top performer by a hair over second-ranked T-Mobile US Inc. (TMUS). AT&T Inc. (NYSE: T) was a close third while Sprint Corp. (NYSE: S) was a distant fourth.
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Recent reports of new merger discussions between Sprint and T-Mobile have not bolstered Verizon's share price. While such a merger would reduce the number of U.S. carriers from four to three, the Sprint-T-Mobile combination would still trail Verizon in subscriber numbers.
The problem for Verizon, though, is that its subscriber numbers are declining while T-Mobile's are shooting higher. Compared with the first quarter of 2016, Verizon added just over 1% to its postpaid subscriber total in the first quarter of this year while T-Mobile added 8% and Sprint added 2%.
Both smaller competitors have taken direct aim at Verizon with promotional offerings to encourage Verizon customers to switch. Verizon lost 307,000 postpaid customers in the first quarter.
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Another weight on Verizon is the unlimited data plan the company was essentially forced to offer after both Sprint and T-Mobile introduced similar plans. The unlimited data plan threatens both average revenue per user and Verizon's network performance.
Verizon stock closed at $45.39 per share on Friday, down less than 0.1% for the day. The stock's 52-week range is $44.46 to $56.95, and the 12-month consensus price target is $49.79, according to MarketWatch. The company's dividend yield ended the week up slightly at 5.09%.
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