Verizon Communications: A Stronghold in Telecom
Verizon Communications (VZ) stands as a testament to resilience amidst tumultuous market conditions. With a newly declared quarterly dividend of $0.6775 per share, this telecommunications titan boasts a commendable yield of approximately 6.3%. Despite the latent challenges, including competitive pressures in the wireless sector, Citi analyst Michael Rollins remains optimistic about Verizon’s trajectory.
After engaging with company management, Rollins found that Verizon is not just surviving but actively seeking to double its converged wireless subscriptions from 16% to 17% over the next three years. This shift reflects an intention to bolster its customer base by enhancing the synergy between its wireless and broadband offerings. However, the analyst notes that although the postpaid phone customer losses are expected to continue in the short term, there’s a flicker of hope that a turnaround could occur in Q3. Moreover, with a solid business upgrade program in the pipeline, potential investors should pay careful attention to upcoming results, as positive trends could provide compelling catalysts for stock growth. Rollins maintains a buy rating with a price target of $48, asserting that the company’s financial prospects remain “under-appreciated.”
Restaurant Brands International: A Culinary Powerhouse
Pivoting from telecommunications to fast food, we turn our attention to Restaurant Brands International (QSR), the parent company behind beloved franchises like Tim Hortons and Burger King. Offering a quarterly dividend of $0.62, which translates into an annualized yield of around 3.7%, QSR provides both steadiness and growth potential.
Evercore analyst David Palmer’s optimism for QSR stems from the company’s statistical projection of 8% organic profit growth between 2024 and 2028. While he anticipates slightly lower systemwide sales growth of 5% and 6% over the next two years, Palmer argues that efficient cost management and targeted expenditure will keep profitability on track. This narrative suggests a deviation from conventional models—where sales numbers determine earnings—highlighting QSR’s robust approach to bolstering its margins. Notably, Palmer envisions a price target of $86 based on 2025 and 2026 earnings estimates, underlining that QSR is currently undervalued compared to peers like Yum Brands and McDonald’s.
EOG Resources: A Strategic Play in Energy
Finally, we examine EOG Resources (EOG), a leader in oil and natural gas exploration and production. Recently, EOG made waves by acquiring Encino Acquisition Partners for $5.6 billion—an undertaking that is projected to enhance their free cash flow and accelerate shareholder returns. Following a 5% increase in dividends to $1.02 per share, the company brands itself as an attractive dividend stock with a 3.1% yield.
Analysts like RBC Capital’s Scott Hanold have lauded the acquisition as a strategic move that will bolster EOG’s position in the Utica region, anticipating a considerable increase in production capabilities over the next few years. Managed to maintain a low net debt to capital ratio at 0.3x, EOG is positioning itself favorably even in a fluctuating market. Hanold advocates buying EOG stock, setting a price target of $145, indicating that the company’s upward trajectory appears solid in the long term, especially with a promise of shareholder returns at 100% of free cash flow.