Has Verizon Become the Perfect Stock?http://www.fool.com/investing/general/2012/06/21/has-verizon-become-the-perfect-stock.aspx Dan Caplinger
June 21, 2012
Every investor would love to stumble upon the perfect stock. But will you ever really find a stock that provides everything you could possibly want?
One thing's for sure: You'll never discover truly great investments unless you actively look for them. Let's discuss the ideal qualities of a perfect stock, then decide if Verizon (NYSE: VZ ) fits the bill.
The quest for perfection
With those factors in mind, let's take a closer look at Verizon.
Source: S&P Capital IQ. Total score = number of passes.
Since we looked at Verizon last year, the company hasn't been able to improve on its three-point score. But shareholders are quite pleased with the stock's 20% gain over the past year.
Verizon continues to be a dividend powerhouse, vying with rival AT&T (NYSE: T ) for the top spot among Dow stocks. Despite the need for huge capital investments to support and build wireless networks, Verizon maintains far stronger free cash flow than its relatively modest net income would suggest.
But the telecom industry has transformed into a growth-centered business, and one key to success is to secure enough wireless spectrum to operate efficiently. Both AT&T and Verizon have taken steps to build up their spectrum assets, but their respective proposals have raised controversy. The failed merger with T-Mobile actually cost AT&T spectrum, which T-Mobile claimed as part of its break-up fee. But Verizon's deal to buy spectrum from a consortium of cable companies including Time Warner Cable (NYSE: TW