Shares of Verizon failed to keep pace with the Dow Jones Industrial Average in 2013, gaining only 12%, while the Dow doubled that return. Moreover, Verizon's stock trades at a nosebleed-inducing 64 times trailing earnings.

How did this happen?


In the video below, Fool analyst Anders Bylund explains how Verizon and fellow Dow telecom AT&T are fighting back a surge of revitalized rivals. He'll also tell you why the sky-high P/E ratio shouldn't scare Verizon investors. Spoiler alert: Think "amortization and depreciation."

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Verizon may offer one of the Dow's largest dividend yields, but does that make it an automatic income investor favorite? Maybe not. If you're looking for some long-term investing ideas, you're invited to check out The Motley Fool's brand-new special report, "The 3 Dow Stocks Dividend Investors Need." It's absolutely free, so simply click here now and get your copy today.


The article Why Verizon Only Gained 12% in 2013 originally appeared on Fool.com.

Fool contributor Anders Bylund has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.


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