“Ugly Read from Verizon!” – Jim Cramer Slams the Telecom Giant Verizon Communications (VZ)

Victor HaleSunday, Apr 13, 2025 7:12 pm ET
79min read
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Jim Cramer’s recent critique of Verizon Communications (VZ) has ignited debate among investors, as the “Mad Money” host labeled the telecom giant’s March performance an “ugly read.” With shares plummeting 6.5% in a single month, Cramer’s skepticism underscores broader concerns about the telecom sector’s resilience in a tightening economic landscape. This article dissects Cramer’s arguments, Verizon’s operational strengths and weaknesses, and the macroeconomic crosscurrents shaping its 2025 outlook.


The Market Context: Telecom Struggles and Trade Tensions

Cramer’s criticism emerges amid a “sorting period” in markets, where companies reliant on Chinese imports face headwinds from punitive U.S. tariffs, including a 145% levy on certain goods. While Verizon’s direct exposure to China is unclear, the sector’s broader vulnerability to inflationary pressures and regulatory uncertainty has weighed on investor sentiment.

TMUS, T, VZ Closing Price
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reveals VZ trailing peers, despite its stable cash flows and dividend history.


Verizon’s Mixed Signals: Growth or Stagnation?

Despite operational亮点, Verizon’s fundamentals are under scrutiny. Evercore ISI’s April upgrade to “Outperform” cited postpaid subscriber growth (+65,000 net adds), robust business wireless expansion, and broadband momentum. However, Cramer argues these metrics are insufficient in a market prioritizing growth over yield. “I don’t like to buy a stock just for the yield when it doesn’t have growth,” he reiterated, referencing Verizon’s 6.9% dividend yield—a high payout that Cramer views as a “trap” without配套 earnings catalysts.

The company’s strategic moves, such as its $31 billion acquisition of Frontier Communications and fiber expansion, aim to diversify revenue streams. Yet Cramer’s team remains unconvinced, ranking VZ sixth in their stock list behind AI-driven stocks they deem “more compelling for rapid returns.”


Macro Risks: Tariffs, Unemployment, and Earnings Pressure

Cramer’s broader economic warnings amplify concerns for Verizon’s trajectory. With U.S. tariffs potentially inflating costs and unemployment risks rising, corporate earnings could face downward revisions. While analysts project 12.2% S&P 500 earnings growth in 2025, Cramer questions whether this optimism is sustainable. For Verizon, margin pressures from rising costs and slowing business investment could strain its already narrow growth path.


Conclusion: Defensive Play or Overvalued Relic?

Verizon’s valuation hinges on investor priorities. For income-focused portfolios, its dividend remains a draw, but Cramer’s warning—that yields without growth are “unattractive”—resonates. Data supports this:
- Dividend Sustainability: Verizon’s payout ratio (73%) is manageable, but free cash flow growth has stagnated at ~2% over five years.
- Competitor Outperformance: AT&T and T-Mobile have surged 12% and 18% YTD, respectively, as Verizon languishes with a 3% decline.
- AI vs. Telecom: NVIDIA’s 50% YTD gain exemplifies market favoritism toward transformative sectors over utilities.

Final Take: Verizon is a defensive holding in a volatile market, but its lack of growth drivers and macroeconomic risks make it a poor fit for aggressive investors. Income seekers may hold, but Cramer’s skepticism—rooted in valuation and opportunity cost—suggests favoring sectors with clearer upside. As tariffs and unemployment loom, Verizon’s “ugly read” may yet worsen unless it proves it can innovate beyond its fiber and dividend playbook.

VZ Dividend Yield (TTM)

In 2025, stability is no longer enough. For Verizon, the path to relevance requires more than just keeping the lights on.