Today we are looking under the hood of another Dow Jones Industrial Average constituent, which has been a relative underperformer within the SIA Dow Jones Industrial Average Report for many years. Verizon Communications Inc. is a major U.S. telecommunications company that provides wireless services, broadband internet including fiber via its Fios brand, and business network solutions. It is one of the largest mobile carriers in the U.S., with nationwide coverage and a strong infrastructure backbone.
Because of its core business of providing essential services like mobile connectivity and internet access, Verizon is considered a defensive stock. This means it tends to perform more steadily during economic downturns, as people and businesses usually continue paying for phone and internet services even in challenging times. However, that same stability often comes at the cost of slower growth, making Verizon less attractive to growth investors who are focused on rapid earnings and stock price appreciation.
This defensive nature is observable in the attached SIA matrix position chart, where it can be seen rallying up to the bottom of the SIA favored zone in the early part of 2025 when the markets were in retreat, only to fall back into the unfavored red zone of the report as high volatility growth stocks took the front seat among investors once the selloff dissipated. Currently, Verizon shares sit in 25th position within this SIA Dow Jones Report and have gained 7.71% year to date but are down 5.72% over the past month alone. It is also interesting to note that VZ shares are essentially flat over the last five years at negative 0.85%, which might liken it to Canadaâs equivalent stock BCE.TO, whose shares are down 2.91% over the same five-year time frame. In the attached candlestick chart, we have also added a trend line where shares of VZ are seen trading on the underside for the first time since 2023. This is cause for pause given that the VIX is rising and the market appears to be growing nervous with growth stocks, where VZ does not seem to be finding the same tailwinds it enjoyed during the previous selloff.
The point and figure chart with the SIA matrix position chart engaged shows just how unfavored Verizon shares have been over the past decade, where consistently with only a few exceptions, its shares have resided in the SIA unfavored zone of the report. VZ shares are currently testing support at $39.52, with upper resistance measured at $44.50 and $46.30. We have also highlighted a zone of support at the $34.40 to $35.79 levels, which is along the positive trend line. Verizon is a member of the favored SIA Telecommunication Services sector, but it is a relative underperformer within the group, even though it does tend to gain investor interest during times of market uncertainty. This may make VZ a stock to monitor for any movement, if for no other reason than thematic relevance and as a potential barometer of market risk aversion.
Disclaimer: SIACharts Inc. specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investors investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIACharts Inc. nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.
