We recently published a list 11 best countercyclic shares to buy according to analysts. In this article we will look at where Verizon Communications Inc. (NYSE: VZ) stands against other best countercyclic shares to buy according to analysts.
Countercyclic shares stand out because they tend to perform well during economic decline, which offers relative stability when markets become volatile. These resilient companies usually work in more defensive sectors such as utilities, consumers staples and health care and offer products and services that consumers need, regardless of how tight their wallets become. Moreover, the truly countercyclic shares are those who experience gears in growth during recessions, because consumers are actively looking for ways to save money – think of discount shops or cheap clothing store. What makes the best countercyclic shares especially mandatory is their stability during decline: investors seek refuge in these shares because they tend to maintain (or even increase) their value, while other market segments are struggling.
Financial theory, such as pioneer by Markowitz ‘Modern Portfolio Theory (1952), suggests that the inclusion of cyclical shares in a portfolio can improve the total risk-corrected return by reducing volatility and at the same time not reducing the return profile. Modern literature emphasizes that effective diversification can be achieved by combining financial assets of which the return has been correlated with each other; Tegencyclic shares correspond well with this principle because of their low or even negative correlation with the broad markets. Empirical studies confirm that portfolios containing countercyclic shares tend to show lower volatility and more stable returns during recession periods – this is a highly sought -after property by investors. The legendary fund manager Peter Lynch also emphasized the power of stable companies in recessions; This is what he said:
“In economic decline, invest in companies that make essential products; people will still buy toothpaste and food, regardless of the economy.”
Also read:10 best shares with a low risk to buy in 2025.
We believe that the current market conditions may be suitable for investors to consider adding the best countercyclic shares to their portfolios. The biggest problem we see with the current US stock market is that the Trump 2.0 rate is unrest and an abundance of other aggressive shifts in the policy position of the new administration in the future. Consumers, although still strong and healthy, have a rapid deterioration of confidence – consumer confidence desex fell sharply in March to the lowest reading since January 2021. Even the Trump administration itself admits that his trade and doo policy can cause a delay in the short term, but says they should lead to “the Golden Age of America” in the long term.
Moreover, business surveys show that more and more people are expecting fewer jobs in the coming months. A sharp deterioration in both metrics has historically merged with the start of various recessions, such as the Dot-Com Bubble Burst, the 2008 crisis and the Bear market of 2022. It is no surprise that many renowned research boutiques, including Yardeni Research and Goldman Sachs, will have a chance that the American Economy has been having the American Economy that the American Economy has been bothered that the American Economy has been degraded that the American Economy has been degraded that the American Economy has been degraded that the American Economy has been degraded that the American Economy has been degraded that the American Economy has been dehymed that the American Economy in the Chance of the American Truck remains on average under 50%).
The drivers of a recession can be a potential one -off inflation shock of the rates expected for next week, a widespread delay of the expectations of the business Capex that can cause dismissals, as well as a more economical consumer because of the overall uncertainty and deterioration in purchasing power. Under such circumstances, counter-cycle shares can witness a considerable gear in their company, which in turn can be translated into superior returns compared to the broad market. We believe that the best counter-cycle shares according to analysts are a considerable potential advantage, as well as a proven state of service of exceptional performance during previous economic cycles.
We have consulted business literature on the characteristics of the best cyclical shares and manually selected 20-30 shares with a history of good performance during economic decline, such as the Bears Markets of 2008 and 2022. Then we select the top 11 shares with the largest average upward potential as estimated by analysts. For each stock we also include the number of hedge funds that the shares possess from Q4 2024.
Why are we interested in the shares that stack hedge funds? The reason is simple: our research has shown that we can surpass the market by imitating the best share choices of the best hedge funds. The strategy of our quarterly newsletter selects 14 CAP and Large-CAP shares every quarter and has returned 373.4% since May 2014 and has reported its benchmark with 218 percentage points (See more details here).
Is Verizon Communications Inc. (VZ) The best cyclical stock to buy according to analysts?
A smiling customer who receives solutions for customer contact center on their smartphone.
On average upward potential: 10.57%
Number of holders of hedge funds: 74
Verizon Communications Inc. (NYSE: VZ) is the second largest global telecommunication company and the largest wireless carrier in the United States, with around 146 million subscribers. The company works via two segments: the Consumer Group, which offers wireless and wireline services to retail customers, and the Business Group, which offers communication solutions to companies and government customers. VZ is considered a cyclical stock, because the world continues to rely on its essential communication services and connectivity solutions, even during recessions.
Verizon Communications Inc. (NYSE: VZ) yielded strong financial and operational results in 2024, with the income of wireless service grew by 3.1% and adapted EBITDA grew by 2.1%, both larger than the center of accompanying reach. The company added nearly 2.5 million postpaid mobility and broadband subscribers while they expanded the margins, with Postpaid telephone network adds to almost 900,000 for the year. Broadband performance was particularly strong, with 1.6 million additions from subscribers in 2024, including nearly 4.6 million fixed wireless access subscribers, which generated more than $ 2.1 billion in income.
Looking ahead to 2025, Verizon Communications Inc. expects (NYSE: VZ) The revenue growth of the wireless service between 2% and 2.8%, with the underlying growth almost double when excluding the consequences of promotional depreciation. The company launched its AI Connect strategy to use existing network assets and Edge Computing options, with a current funnel of more than $ 1 billion in opportunities. Management continues to concentrate on operational excellence and financial discipline, maintaining the priorities of the capital allocation of investing in the company, supporting dividend growth, paying debts and considering purchasing shares. We include VZ in our list of best countercyclic shares, because it has a strong history of better performance of the US stock market during bear markets, including year-to-date, since the US shares are in correction mode.
Generally, vz is in 10th place On our list of best countercyclic shares to buy according to analysts. Although we recognize the potential of VZ as an investment, our conviction is believed that AI shares have a greater promise to deliver a higher return and to do this within a shorter time frame. There is an AI shares that have gone up since the beginning of 2025, while popular AI shares lost around 25%. If you are looking for an AI share that is promising than VZ, but that deals with less than 5 times its income, view our report on this Cheapest AI stock.
Read next: 20 best AI shares to buy now And 30 best shares to buy now according to billionaires.
Publication: none. This article was originally published on Insider monkey.
