Why Verizon Remains an Attractive Stock Pick

On the July 13, 2026, episode of The Morning Filter podcast, hosts Susan Dziubinski and Morningstar Chief US Market Strategist Dave Sekera answered a question from their audience about Verizon Communications VZ. Here’s an excerpt from the conversation.

Why We Still Like Verizon

Susan Dziubinski: All right, time for our question of the week. Now, as a reminder, if you have a question for Dave, send it to our inbox. You can reach us at themorningfilter@morningstar.com.

This week’s question is from Jeff, who wants an update on one of your prior picks, Verizon. Jeff is asking if you still like the stock after it got dropped from the Dow Jones Industrial Average, and as it faces new competition from SpaceX SPCX.

Dave Sekera: Yes. It’s still a pick. It’s a 4-star-rated stock, trades at just over a 20% discount to fair value. We rate the company with medium uncertainty. We assign it a narrow economic moat. I quickly spoke with Mike Hodel last Friday. He’s our communications analyst who covers Verizon. It’s interesting: If you look at the stock performance this year, it’s actually doing very well, earlier this year, right up until the point that SpaceX filed its S-1. Now, we don’t think that SpaceX will end up becoming a direct competitor to Verizon in the traditional wireless business. Mike outlined a number of different reasons why he didn’t think that’s going to occur. A couple of different things, like they just don’t have the spectrum to be able to do it today. There are a lot of upfront costs that they would have to spend on it to be able to get themselves prepared to do traditional wireless. We don’t think that’s going to happen. In fact, the government just had a spectrum auction out there, and the company didn’t bid very aggressively at all. It doesn’t look like they’re trying to buy that spectrum today.

Now, as far as their technology goes, in our view, the satellites just can’t match the kind of capacity that you can see that the cellphone towers or the terrestrial towers provide. The attributes that you need to be competitive in traditional wireless, you have to be efficient. Those cellphone towers, you can have the fiber backhaul and reuse spectrum. You have especially high density for the amount of spectrum that you have. A lot of different things that you just don’t see in the current satellite technology today. For the foreseeable future, we think that the satellite technology is probably more of what they have as a coverage layer provider.

For example, I think T-Mobile TMUS has partnered with SpaceX, with the satellite provider there, to provide internet coverage for those areas where you don’t have terrestrial coverage. I think the risk here to Verizon is really more about customer coverage in those rural areas. Historically, Verizon was always known as having the best geographical coverage. But now, if you have that satellite coverage in some of those areas where you didn’t have coverage by the other wireless providers, you don’t have that same kind of competitive advantage, but it’s probably not a large enough percentage of Verizon’s overall business to be meaningful to the valuation.

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