Out Fox The $treet

Verizon made a near perfect dividend hike of 2.1%. The forward dividend yield is now about 4.5%. The wireless company has annual dividend payout obligations of nearly $10 billion. Exiting the media business would allow Verizon to avoid the tech wars. Last week,   Verizon Communications   ( VZ )   increased the dividend   for the 12th consecutive year. Investors wanted a bigger hike due to higher cash flows from tax reform, but this dividend hike was the perfect amount to not lose shareholders while preserving cash for the coming tech war.  Read the full article on Seeking Alpha.  Disclosure: No position mentioned. Please review the disclaimer page for more details.   

Summary Verizon agreed to purchase AOL for $4.4 billion in cash. The deal adds debt to an already large debt load. AOL doesn't appear to add the exciting assets suggested by the press release with the company offering limited growth. At this point, any deal adding debt isn't appealing, but the materiality of the deal doesn't adjust a breakout forecast for Verizon's stock. The validity of Verizon Communications (NYSE: VZ ) purchasing AOL (NYSE: AOL ) is very much a debate, but the one part missing from those discussions is the use of cash for the deal. One of the biggest concerns with an investment in Verizon is the debt load created from the transaction with Vodafone (NASDAQ: VOD ). The basis of the AOL deal is better sculpted on whether it is worth the cash. Read the full article at Seeking Alpha. Disclosure: No position mentioned. Please review the disclaimer page for more details. 

For the fourth quarter of 2013, Verizon Communications ( NYSE: VZ     ) reported a surge in operating margins in the wireless sector due to lower subsidies for new accounts. The question is whether the wireless provider can continue generating these higher margins with Sprint Nextel  ( NYSE: S     ) and T-Mobile ( NYSE: TMUS     ) in customer-acquisition mode. While Verizon is generating solid gains in FiOS Internet and video segments, the company is increasingly dominated by its wireless division. In total, fourth-quarter revenue only gained 3.4%, but the company was able to hold expenses down. The combination sent operating margins surging, but the lack of spending to attract new customers could hurt growth in 2014 and beyond. Read the full article here . Disclosure: No position mentioned. Please review the disclaimer page for more details. 

Last week Verizon ( VZ ) and Vodafone ( VOD ) reached the historic deal for Verizon to obtain sole ownership of the much coveted Verizon Wireless asset. Regardless of your position on the transaction, the stock action of the two stocks since the leak of the purchase discussions at the end of April tells the story. In the couple of years prior to the news of the talks heating up, Verizon had easily outperformed Vodafone. Remember that Verizon owns 55% of Verizon Wireless while Vodafone owns the rest. Partially due to the focus on the better performing US market, Verizon had easily outperformed Vodafone over that time period. This fact was greatly enhanced due to Vodafone being focused on Europe and emerging markets outside of the Verizon Wireless ownership. Read the full article at Seeking Alpha. Disclosure: Long VOD. Please review the disclaimer page for more details. 

Prior to the open on Tuesday, Verizon Communications, Inc. (VZ) reported disappointing Q4 adjusted earnings as high subsidy costs for Apple (AAPL) iPhones hurt margins. While the company is becoming the leading domestic provider for 4G wireless services, the biggest question in the telecom sector remains whether it can continue to generate enough cash flow to pay for the capital expenditures to constantly upgrade the networks. Read the full article at Seeking Alpha. Disclosure: Long VOD. Please review the disclaimer page for more details. 

Vodafone (VOD) remains a better investing option compared to Verizon (VZ) or, for that matter, AT&T (T) . While Vodafone remains a pure play on international wireless growth, the other two companies are bogged down with wireline operations. Vodafone is a U.K.-based telecommunication firm, with operations in over 30 countries, and serves more than 400 million customers worldwide. It is a global telecom giant with a significant presence in countries like Germany, Italy and Spain, as well as India, Africa and the Middle East. More importantly, the crown jewel of Verizon, Verizon Wireless, is 45% owned by Vodafone, giving the company a huge investment in the U.S. Another important distinction is that the U.S. firms continue to throw on huge amounts of debt in order to support their significant dividend payout ratios. Due to stronger stock gains, their dividend yields are now lower than Vodafone's, making the Vodafone stock more attractive. Read the full article at Seeking Alph...

Verizon Communications (VZ) continues to be able to squeeze out costs from a slow growing revenue base. Though Q212 revenues only grew 3.7%, the bottom line grew by 12.3%. This gain was largely due to a reduction in the cost of services and sales by $262M combined with a $38M reduction in interest expense. Verizon is a global leader in delivering broadband and other wireless and wireline services to consumer, business, government and wholesale customers. Verizon Wireless has more than 94M retail customers though it is 45% owned by Vodafone (VOD) . Though operating efficiency continues to improve the most concerning part has to be that wireless revenue is only increasing 7.3%. If Sprint (S) ever becomes a more formidable competitor, Verizon might see the ability to lower costs and improve margins come to an end with little growth to spare. Read the full article at Seeking Alpha. Disclosure: Long AAPL. Please review the disclaimer page for more details. 

After the close last night, Verizon Communications (VZ) agree to buyout Terremark WorldWide (TMRK) for $19. The stock closed just above $14 yesterday providing for a 35% pop today. TMRK was one of the larger holdings in the Opportunistic portfolios so that initially gave those portfolios a nice pop today. Unfortunately the market has become overly worried about a little disturbances in Egypt and the market has sold off since the opening. Did we learn anything from Greece? The main reason we're excited about this offer from Verizon is that TMRK was on the list of stocks to sell. TMRK has had a huge gain over the last year due to its cloud offerings and growth. Unfortunately though they continue to borrow money to open new centers and lack actual profits. Considering the path to profits leads us to at least 2012, this investment had become extremely risky. Its interesting that VZ claims the deal will have no impact on earnings in 2011. Possibly TMRK is so small that any impact ...

After the close, Terremark ( TMRK ) announces a dela with Verizon Business, unit of Verizon ( VZ ) to utlize 25,000 sq/ft in the Miami and Virgina data centers. At first glance this seems like a significant deal for TMRK, but no financial terms were released. The main reason given for the win is that TMRK has data centers that meet or exceed federal standards and Verizon Business has a thriving business with the governemnet. Anybody following us knows that our big reason for buying TMRK originally was its connection to the governements movement on the internet. As part of the agreement, Verizon will utilize 25,000 square feet of colocation space at Terremark’s world-class NAPs in Miami, Florida and Culpeper, Virginia that are designed to meet or exceed federal government standards for data communications and hosting facilities requiring stringent guidelines for power and cooling redundancy. “When looking at the federal space, Terremark has clearly distinguished itself as a leader in pr...