Verizon Communications CEO Hans Westberg painted an optimistic picture of the future on Thursday, telling CNBC’s Jim Cramer that the telecoms giant has “more growth opportunities than we’ve ever had before.”
Vestberg’s comments in an interview with “Mad Money” came after Verizon held an investor day earlier on Thursday, during which it outlined its strategy for the years ahead. It is aimed at growth of at least 4% for services and other revenues in 2024.
“We’ve done a lot in the last few years and we’re here right now with more growth opportunities than we’ve ever had,” Westberg said. He cited his recent acquisition of the valuable TracFone wireless brand and the major acquisition of the C-Band spectrum in early 2021, a move to support the construction of 5G in the United States. He also mentioned the sale of Verizon Media last year.
“We built a network for many, many different things, a multifunctional network,” Westberg said.
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Verizon also announced on Thursday that it has entered into a strategic partnership with the mother of Facebook Meta. It focuses on how Verizon’s 5G network and computing power can help build the so-called metauniverse, a new and top priority for social media-led social media company Mark Zuckerberg.
Westberg stressed that there are still early innings for the development of these immersive digital worlds known as the metauniverse. The concept was not even on his radar when he joined Verizon in 2017, initially as chief technology officer and president of Global Networks, he said. He became CEO in 2018.
“We’re just starting in this area … and it’s not even in my numbers for the future because it’s so early,” Westberg said. “But it’s clear that we’ve built a network that’s so different from everyone else in the market. That’s why we talked to Meta, and that’s why they chose to work with us.”
Dividend perspective
Shares of Verizon rose nearly 1 percent on Thursday, closing at $ 54.66 to bring their year-over-year earnings to 5.2 percent. The S&P 500 fell 8.5% over the same period.
Investors are not looking for telecommunications companies like Verizon for impressive revenue growth. Shares tend to be seen as a relatively defensive game, with dividends being a key reason some income-seeking investors want to own. Verizon boasts a dividend yield of 4.7% based on Thursday’s close.
Kramer asked Westberg if the company’s focus on growth initiatives would prevent Verizon from further increasing dividend payments.
The CEO said Verizon has a clear strategy for allocating capital, with the main priority being to reduce capital intensity to below 12% in 2024. The second priority is to continue to grow the dividend, Westberg said.
“Then we pay off our debt and then we come to the repurchase of shares, and today we also talked about the fact that we will now start considering the repurchase earlier than we said before,” he said.
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