Verizon
Communications Inc. (NYSE:VZ), which is a leading player in the US communications industry, has been
in the news for its purchase of the 45% stake that Vodafone held in Verizon
Wireless. Though widely supported by the street, some investors were worried as
to whether the company would be able to cope with the huge amount of debt that
had to be issued for the deal, especially since the growth in the telecom
sector has not been robust and competitors are engaged in aggressive pricing.
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However, it should be noted that interest rates are highly favorable for this
move, and it should give the company additional firepower to deal with future
challenges in the sector. Not only has the company raised its dividend for the
7th year in a row, its growth prospects appear bright, as well. Together, they
should dispel any lingering doubts about the wisdom of the Vodafone deal or the
company's ability to succeed in the short term.