iPhone 4s-Armed, is Verizon Ready to Soar to $47 and Beyond? - Stock Review

Will Verizon (VZ) benefit from the iPhone 4s Wave, now that Sprint (S) has, at long last, secured the iPhone from Apple (AAPL)?

It appears so, and that's a major reason I'm Reiterating my Buy call for Verizon, first discussed here at the International Business Times on Septmber 22, 2011 at a price of $34.61.

Sprint, as noted, has secured the rights to the iPhone 4s, and to say the additiona has create commotion in tech and media sectors circles, would be an understatement. The buzz about the iPhone 4s has been the most since perhaps Microsoft's (MSFT) hey-day in the 1990s, and its much-anticipated launches of new operating systems.

What's more, if the iPhone 4s can come close to matching its hype, the iPhone 4s has the potential spark an iPhone 4s Wave, if you will in the cell phone service provider sector -- in other words, a renaissance in the sector -- one that attracts new minds (translation: subscribers) that previously had not considered the iPhone 4s or even smartphone

And that's good news, not only for iPhone 4s newbie Sprint, but also for oldbee iPhone 4s carrier Verizon.

Verizon Communications, remains well positioned in the competitive wireless sector. Look for 2011 revenue to recover to $110 billion, up 3 percent, with a rise to $115 billion seen for 2012.

Verizon should see a substantial revenue gain in its wireless data services, as more subscribers access data on that aforementioned iPhone 4s, and on the existing iPhone4.

Meanwhile, Verizon's FiOS t.v. service will continue to impress investors and will help offset revenue doldrums in its landline (wireline) unit. however, Verizon's landline business continues to provide a modest amount of revenue stability.

Verizon: A Wireless Subscriber Giant

As of June 2011, Verizon has 25 million landline voice connections, 89.7 million wireless subscribers, and 16.6 million wholesale subscribers on its network. Verizon's shares closed Wednesday up 17 cents to $36.67.

Meanwhile, competition may hurt overall subscription prices. Apple's (AAPL) iPhone smartphone continues to provide a subscriber tailwind.

A rock-solid $2.00 annual dividend -- good for a cool 5.45% yield at the current stock price of about $35.40 -- adds to the positive mix.

The Thomson Reuters First Call FY2011/FY2012 EPS estimates for VZ are $2.23 to $2.60. That 2011 EPS looks about 5% low, according to my analysis.

Technical Analysis: Technically, Verizon's shares did a slow walk down from $39 to $34 during mid-2011, then plunged to about $32, but the drop was short-lived, and the stock has since moved back above $35. There is the danger of a head-and-shoulders formation, but the calculation here is that the uptrend is stronger and should prevail. Verizon should trade above $47 by mid-2012.

Stock Category: Verizon is ideal for investors who want a comparatively safe, dependable company and stock investment. Don't look for gargantuan growth with VZ. There's only a 5 percent chance you'll lose your entire investment with VZ over a 10-year period. And you'll like the as-noted $2 annual dividend.

2011 Outlook: I view Verizon as a long-term play, but if you're looking to sell VZ within the year, it's probably best to take your profits after it rises to $43-46, if it fails to rise above $47.

Stock Analysis: Verizon Communications is a moderate-risk stock. If an investor has already purchased the company's shares, I'd hold them. If not, I'd consider buying a 50 percent position in VZ now and another 25 percent in one month. Under anay circumstacen I wouldn't buy more than 75 percent of my VZ position before January 2012. I'd put a sell/stop loss at: $27.

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Disclosure: L.C. Jacobs of New York, N.Y. reviews stocks on a quarterly, semi-annual, and annual basis.

L.C. Jacobs has no positions in stocks reviewed, but does own federal, municipal, and corporate bonds.