Telecommunications giant Verizon Communications Inc. (NYSE: VZ) stock has been in a flat trading range for the past 4 months. Its shares are trading up just 6.34% year-to-date (YTD), severely underperforming the S&P 500 Index, which is up 14.54% YTD. The stock may present itself as a solid value play at these prices with historically low multiples compared to the computer and technology sector. Its peers like T-Mobile US, Inc. (NASDAQ: TMUS), Comcast Co. (NASDAQ: CMCSA), and AT&T Inc. (NYSE: T) are trading at historically low forward price-earnings ratios of 9.32 and 8.60, respectively. Here are four reasons to consider buying shares of Verizon for your portfolio.

1) Verizon is Profitable and Growing

Verizon reported Q2 2024 earnings of $1.15 per share, which matches consensus estimates. Revenues achieved a gain, growing 0.6% YoY to $32.08 billion. Wireless Service revenues rose 3.5% YoY to $19.8 billion, but they still missed consensus estimates by over $200 million for the second straight quarter. They blamed the shortfall on a decrease in wireless equipment revenue stemming from lower upgrade volumes. However, this was offset by growing consumer wireless services revenue growth of 3.7% YoY and 1.2% quarter-over-quarter (QoQ).

Verizon has added 3 million broadband subscribers in the past two years. In Q2, 2024, broadband subscribers grew a whopping 17% YoY, adding 391,000 net new accounts. This marks the eighth consecutive quarter of more than 375,000 broadband net additions. Verizon is on track to earn $4.50 to $4.70 per share for the full year 2024, as consensus analyst estimates expect $4.58 per share. Wireless service revenue growth is expected to rise 2% to 3.5% YoY.

2) Verizon's Low Stock Valuation Presents Opportunity

While its peers also trade at single-digit multiples, Verizon trades at 8.75x forward earnings, well under its 10-year historic PE average of 12.42. The consensus analyst price target is nearly 14% higher at $45.68 based on 17 Wall Street analyst ratings. Its forward enterprise value (EV) over EBITDA, at 6.88x, is trailing its 5-year average of 7.59x. Its forward price to cash flow, at 4.66x, is also trailing its 5-year average of 5.45x.

Verizon sold its media division, Verizon Media, to Apollo Funds, owned by Apollo Global Management Inc. (NYSE: APO), for $5 billion in 2021. Verizon Media was primarily comprised of America Online (AOL) and Yahoo, along with some minor AdTech and media platform businesses, including TechCrunch, Engadget, Rivals, and Autoblog. The company was renamed Yahoo. Verizon still maintains a 10% stake in Yahoo.

3) Verizon Stock Pays a 6.68% Annual Dividend Yield

Verizon's $2.66 dividend payout brings its annual dividend yield to an impressive 6.68%. This is higher than its 4-year average annual dividend yield of 5.73%. As the VZ stock price remains deflated, the dividend yield remains high. That yield slips when VZ stock breaks out of its multi-month trading range.

4) Verizon Stock May Be Setting Up a Rectangle Channel Breakout  

Verizon shares have been trading in a rectangle channel since April 2024.

The channel is comprised of a flat-top upper trendline resistance at $41.72 and a flat-bottom lower trendline support at $38.72. VZ attempted to break out on July 17, 2024, ahead of its Q2 2024 earnings release, but was quickly pulled down on the 6% gap in its results. VZ once again tested the $38.72 lower trendline support, which managed to hold, enabling a recovery bounce back to the $40 range. The daily relative strength index (RSI) coiled to the 45-band. Pullback support levels are at $38.72, $37.56, $36.46, and $35.14.