Verizon Communications, Inc. (NYSE: VZ – $52.00) shares climbed to the highest level since July 2014 after the company announced an agreement with Hearst Corp. to form a joint venture for developing digital video programming that targets the mobile-millennial audience. The venture, which will be known as Verizon Hearst Media Partners, will pair Verizon’s technology and Hearst’s digital video content and production capabilities to develop two initial channels of video programming. The content will be distributed across go90, AOL and other distribution platforms, as well as through third-party networks and licensors. The venture will kick off with the launch of two media properties aimed at mobile-obsessed millennials: RatedRed.com, which will feature lifestyle content for young people in the heartland, and Seriously.TV, a comedy network focused on politics. Both RatedRed.com and Seriously.TV are expected to unveil their first content this spring.
Verizon is in enviable financial shape. The company finished the year with almost $4.4 billion in cash on hand and long-term debt of $103 billion, down from $110.5 billion at the end of 2014. This blue chip equity’s appreciation potential to late decade is well above average in my opinion given its above average safety rating, a reasonable valuation of 13 times estimated 2016 earnings of $4.00 per share, rising dividends and a yield of 4.4%.