AC Circuits Series-Parallel Circuit Examples Solution
Learn how to solve series-parallel AC circuit examples step by step with calculations for impedance, current, voltage, power, and factors like Kirchhoff's current law. Enhance your understanding of AC circuits with detailed solutions provided in images.
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Telecommunication Stocks Xinning Wang Verizon Communications Inc.
Contents Sector Overview Discussion of Stocks Business Analysis Financial Analysis Valuation Recommendation 2
Sector Size Total Sector Size is $1.8 Trillion as of the end of 2015. S5TELS Market Cap : 2.64% of S&P 500 Verizon is the only SIM holding : 2.38% of SIM (Market Value $251,328.50; Unit Cost $50.27) 4
Telecom Industries Diversified Telecommunication Services Company Name Market Cap (Billion $) 241.59 205.57 14.94 4.57 16.57 Verizon Communications Inc. AT&T Inc. CenturyLink Inc. Frontier Communications Corp. Level 3 Communications Inc. Wireless Telecommunication Services Company Name T-Mobile US, Inc. Sprint Corp. Market Cap (Billion $) 38.27 27.53 5
Sector Recommendation Increase the weight of Telecom Sector Stocks in SIM Decrease holding of VZ Increase holding of T Company Ticker Price Target Price Upside/Downside Recommendation S&P Weight SIM Weight Target Weight Change Verizon VZ 50.67 54 6.57% NEUTRAL 108 bps 245 bps 108 -137 AT&T T 39.21 42.5 8.39% NEUTRAL/BUY 126 bps 0 bps 156 +156 6
Multiples: Absolute & Relative S&P 500 Absolute Basis High Low P/E 22.5 8.9 P/B 3.6 1.2 P/S 1.8 0.8 P/EBITDA 5.8 2.5 Relative to SP500 P/E 1.20 0.70 P/B 1.46 0.53 P/S 1.32 0.66 P/EBITDA 0.81 0.34 Median 15.8 2.1 1.3 4.2 Median Current 17.1 3.1 1.6 4.8 Current High Low 0.92 0.98 0.90 0.56 0.81 0.79 1.02 0.40 7
50.23 206.56B Previous Close Market Cap Verizon Communications Inc. (Verizon, or the Company) is a holding company that, acting through its subsidiaries, is one of the world s leading providers of communications, information and entertainment products and services to consumers, businesses and governmental agencies. With a presence around the world, Verizon offer voice, data and video services and solutions on Verizon s wireless and wire line networks that are designed to meet customers demand for mobility, reliable network connectivity, security and control. 50.22 0.51 Open Beta 50.64*200 14.77 Bid PE 50.68*100 3.43 Ask EPS 50.17-50.80 Jan 24th 2017 Earnings Date Day s Range 43.79-56.95 2.31 (4.56%) 52 Week Range Dividend & Yield 8,087,235 NA Volume Ex- Dividend Date 14,252,287 52.73 Avg Volume 1- Year Price Target 9
Positives and Risks Positives: Verizon offers a dividend yield of close to 5 percent. has a forward P/E of just over 14, which means it is trading at just 14 times its future earnings. Risks: High debt level($110 Billion). Current Ratio of 0.63. Not a growing market. Wireline revenue dropped 2.2% last year. Price war within the whole industry. 10
Verizon Communications Inc. 52-weeks Performance 11
Multiples: Absolute & Relative S&P 500 Verizon High Low P/E 14.41 11.86 P/B 13.4 9.2 P/S 1.77 1.47 P/EBITDA 5.03 4.08 Median 13.13 11.2 1.63 4.51 Current 13.1 10.16 1.63 4.65 Relative to S&P500 P/E P/B P/S P/EBITDA High 1.46 1.32 1.24 0.81 Low 0.54 0.66 0.7 0.34 Median 1 0.89 0.93 0.57 Current 0.79 1 0.77 0.54 12
Relative to Peers Relative to Peers VZ T USM TDS NTLS TMUS Average EV/EBITD A 6.49 7.7 6.4 4.76 5.98 8.35 6.61 P/E P/S P/B P/CF 5 5.9 7.7 3.9 6.7 7 6.03 12.05 14.33 67.86 125.41 32.33 42.17 49.03 1.49 1.37 0.77 0.47 0.43 1 0.92 11.9 1.79 0.87 0.6 N/A 1.98 3.43 13
DCF Model 10.5% 5.0% Analyst: Xinning Wang Date: Sept 20 2016 Terminal Discount Rate = Terminal FCF Growth = Year 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E $137,389.35 $136,977.19 $138,894.87 $140,700.50 -0.3% $142,529.61 $144,382.49 $146,259.46 $148,160.84 $150,086.93 1.3% $152,038.06 $154,014.55 1.3% Revenue % Growth 1.4% 1.3% 1.3% 1.3% 1.3% 1.3% 1.3% Operating Income Operating Margin 34,509 24.0% 32,875 24.0% 34,029 24.5% 35,175 25.0% 35,632 25.0% 36,096 25.0% 36,565 25.0% 37,040 25.0% 37,522 25.0% 38,010 25.0% 38,504 25.0% Interest and Other Interest % of Sales -$5,135.66 $684.89 0.5% $694.47 0.5% $703.50 0.5% $712.65 0.5% $721.91 0.5% $731.30 0.5% $740.80 0.5% $750.43 0.5% $760.19 0.5% $770.07 0.5% 0.5% Taxes Tax Rate -$1,498.05 -$10,759.09 -$11,195.97 -$10,636.17 -$10,104.37 -$9,599.15 -$9,119.19 -$8,663.23 -$8,230.07 -$7,818.57 -$7,427.64 -5.1% -5.2% -5.3% -5.0% -5.0% -5.0% -5.0% -5.0% -5.0% -5.0% -5.0% Net Income % Growth $27,875.43 $22,800.32 -18.2% $23,527.74 $25,242.45 $26,240.68 $27,218.39 $28,176.97 $29,117.78 $30,042.10 $30,951.14 $31,846.07 3.2% 7.3% 4.0% 3.7% 3.5% 3.3% 3.2% 3.0% 2.9% 15,536 14.9% 463 0.3% 19,075 13.9% 15,070 13.5% (1,460) -1.1% 19,177 14.0% 14,618 13.5% 3,119 2.2% 19,445 14.0% 18,995 13.5% 2,814 2.0% 19,698 14.0% 19,241 13.5% 2,851 2.0% 19,241 13.5% 19,492 13.5% 2,888 2.0% 19,492 13.5% 19,745 13.5% 2,925 2.0% 19,745 13.5% 20,002 13.5% 2,963 2.0% 20,002 13.5% 20,262 13.5% 3,002 2.0% 20,262 13.5% 20,525 13.5% 3,041 2.0% 20,525 13.5% 20,792 13.5% 3,080 2.0% 20,792 13.5% Add Depreciation/Amort % of Sales Plus/(minus) Changes WC % of Sales Subtract Cap Ex Capex % of sales Free Cash Flow % Growth 24,800 17,234 -30.5% 21,820 26.6% 27,353 25.4% 29,091 6.4% 30,106 3.5% 31,102 3.3% 32,081 3.1% 33,044 3.0% 33,992 2.9% 34,926 2.7% 42% 58% 100% NPV of Cash Flows NPV of terminal value Projected Equity Value Free Cash Flow Yield 166,133 225,659 391,792 10.22% Terminal Value 612,455 5.24% Free Cash Yield Current P/E Projected P/E Current EV/EBITDA Projected EV/EBITDA 8.7 14.1 5.4 8.4 10.6 17.2 5.6 8.8 10.3 16.7 5.6 8.6 Terminal P/E 21.0 Terminal EV/EBITDA 11.2 Shares Outstanding 4,077 Current Price Implied equity value/share Upside/(Downside) to DCF $51.12 $54.02 5.67% Debt Cash Cash/share 32,116 4,188 1.03 14
38.73 240.79B Previous Close Market Cap AT&T is the second largest provider of mobile telephone services and the largest provider of fixed telephone services in the United States, and also provides broadband subscription television services through DirecTV. As of 2016, it is also the 17th-largest mobile telecom operator in the world, with 130.4 million mobile customers. AT&T was ranked at #6 on the 2015 rankings of the world's most valuable brands published by Millward Brown Optimor. 38.77 0.34 Open Beta 39*1700 16.68 Bid PE 39.05*300 2.35 Ask EPS 38.73-39.21 Jan 24th 2017 Earnings Date Day s Range 33.01-43.89 1.96 (5.00%) 52 Week Range Dividend & Yield 10,844,449 NA Volume Ex- Dividend Date 24,380,960 40.76 Avg Volume 1- Year Price Target 15
Multiples: Absolute & Relative S&P 500 AT&T High Low P/E 19.59 15.56 P/B 2.17 1.79 P/S 1.64 1.36 P/EBITDA 5.01 4.14 Median Current 17.52 17.68 1.98 1.96 1.51 1.48 4.63 4.52 Relative to S&P500 P/E P/B P/S P/EBITDA High 1.98 0.21 1.15 0.81 Low 0.71 0.13 0.65 0.35 Median 1.33 0.16 0.86 0.59 Current 1.07 0.19 0.70 0.52 17
DCF Model 9.0% 3.0% Analyst: Xinning Wang Date: Sept 20 2016 Terminal Discount Rate = Terminal FCF Growth = Year 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E Revenue % Growth $161,481.10 $177,629.21 $195,392.13 $201,253.89 10.0% $207,291.51 $213,510.26 $219,915.56 $226,513.03 $233,308.42 3.0% $240,307.68 $247,516.91 3.0% 10.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% Operating Income Operating Margin 34,980 21.7% 45,830 25.8% 57,293 29.3% 50,313 25.0% 51,823 25.0% 53,378 25.0% 54,979 25.0% 56,628 25.0% 58,327 25.0% 60,077 25.0% 61,879 25.0% Interest and Other Interest % of Sales -$4,532.00 -$4,985.20 -$5,483.72 -$5,635.11 -$5,804.16 -$5,978.29 -$6,157.64 -$6,342.36 -$6,532.64 -$6,728.61 -$6,930.47 -2.8% -2.8% -2.8% -2.8% -2.8% -2.8% -2.8% -2.8% -2.8% -2.8% -2.8% Taxes Tax Rate $7,005.00 23.0% $7,005.00 17.2% $7,005.00 13.5% $6,701.75 15.0% $6,902.81 15.0% $7,109.89 15.0% $7,323.19 15.0% $7,542.88 15.0% $7,769.17 15.0% $8,002.25 15.0% $8,242.31 15.0% Net Income % Growth $37,452.94 $47,850.19 $58,814.10 $51,380.12 -12.6% $52,921.52 $54,509.17 $56,144.44 $57,828.78 $59,563.64 $61,350.55 $63,191.07 27.8% 22.9% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 24,218 14.5% (1,712) 24,868 14.0% (2,992) -1.7% (24,513) -13.8% 27,355 14.0% (4,934) -2.5% (26,964) -13.8% 28,176 14.0% (5,031) -2.5% (27,773) -13.8% 29,021 14.0% (5,182) -2.5% (28,606) -13.8% 29,891 14.0% (5,338) -2.5% (29,464) -13.8% 30,788 14.0% (5,498) -2.5% (30,348) -13.8% 31,712 14.0% (5,663) -2.5% (31,259) -13.8% 32,663 14.0% (5,833) -2.5% (32,197) -13.8% 33,643 14.0% (6,008) -2.5% (33,162) -13.8% 34,652 14.0% (6,188) -2.5% (34,157) -13.8% Add Depreciation/Amort % of Sales Plus/(minus) Changes WC % of Sales Subtract Cap Ex Capex % of sales (22,206) -13.8% Free Cash Flow % Growth 37,752 45,213 19.8% 54,271 20.0% 46,751 -13.9% 48,154 3.0% 49,598 3.0% 51,086 3.0% 52,619 3.0% 54,198 3.0% 55,823 3.0% 57,498 3.0% 46% 54% 100% NPV of Cash Flows NPV of terminal value Projected Equity Value Free Cash Flow Yield 326,045 381,560 707,605 10.33% Terminal Value 903,292 5.83% Free Cash Yield Current P/E Projected P/E Current EV/EBITDA Projected EV/EBITDA 9.8 18.9 6.6 12.4 7.6 14.8 5.6 10.4 6.2 12.0 4.6 8.7 Terminal P/E 15.6 Terminal EV/EBITDA 10.5 Shares Outstanding 6,141 Current Price Implied equity value/share Upside/(Downside) to DCF $39.54 $42.02 6.22% Debt Cash Cash/share 32,116 4,188 0.68 18
Recommendation Company Ticker Price Target Price Upside/Downside Recommendation S&P Weight SIM Weight Target Weight Change Verizon VZ 50.67 54 6.57% NEUTRAL 108 bps 245 bps 108 -137 AT&T T 39.21 42.5 8.39% NEUTRAL/BUY 126 bps 0 bps 156 +156 20
Q&A? 21
