Is Verizon a Great Dividend Stock? The Motley Fool

VZ generated approximately 69%, 24% and 7% of the company’s revenue from its Consumer, Business, Corporate & Others segments, respectively in FY 2020. Excluding contributions from Corporate & Others, Verizon’s Consumer, and Business segments accounted for 88% and 12% of its FY 2020 operating profit, respectively. Verizon is a good stock to buy, as its valuations are undemanding and the company places a strong emphasis on profitability by refusing to close option review engage in price competition. Management hasn’t been overly optimistic publicly about home wireless broadband, known as Verizon Home, but I think it’s a game-changer based on personal experience with the service. I recently started using Verizon 5G in my home, and I’m getting faster and more reliable service than cable broadband internet from Comcastfor less money. That’s a compelling offering for the 115.4 million customers with Verizon service.

Since dividends are paid from the cash left over after a company pays for its capital expenditures. On the other hand, jfd bank review dividend growth has been relatively modest. Lower than I like for a good dividend stock with its dividend yield.

VZ Stock Price

Higher ratings mean lower risk to those who lend the company money. Specific to the dividend, the company stated it is “positioned to support further consistent dividend increases”. It’s clear the company has established a nice history of increasing dividends. Verizon’s ex-dividend date falls in the month PRIOR to when it pays dividends.

VZ’s total operating revenues increased 4.3% year-over-year to $32.92 billion in its fiscal third quarter, ended September 30. Its operating income stood at $8.91 billion, up 16% from the same period last year. And its net income grew 45.5% from the year-ago value to $6.55 billion. umarkets scam The company’s adjusted EPS increased 12.8% year-over-year to $1.41. In Q2 of 2022, Verizon Communications reported $1.24 in earnings per share , compared to $1.40 last year at the same time. The company also reported revenue of $33.8 billion, which was actually flat from 2021.

Verizon holds several positive signals, but we still don’t find these to be enough for a buy candidate. At the current level, it should be considered as a hold candidate in this position whilst awaiting further development. Due to some small weaknesses in the technical picture we have downgraded our analysis conclusion for this stock since the last evaluation from a Buy to a Hold/Accumulate candidate. I am not a licensed investment adviser, financial advisor, or tax professional. And I’m not providing you with individual advice in any of these areas. A personal finance blog where I focus on building wealth one step and one dividend at a time.

• Fusion Mediawould like to remind you that the data contained in this website is not necessarily real-time nor accurate.
• For an investor looking to initiate a position or add to a small position, price dips are usually a good time to buy.
• If you are unsure on how to invest in dividend stocks or are just getting started with dividend investing.
• And, Verizon’s dividend growth forecast is nothing to get excited about from my perspective.
• Telecommunications stocks may not be in favor right now, but I think there’s a lot for investors to like.
• I would go even further and say telco is just an unpopular investment, regardless of how the business is doing.

While it doesn’t make its own phones or computers, it does control a large portion of both wired and wireless data access for consumers, enterprises, and municipalities. Verizon is more than just a wireless carrier – in fact, Verizon Wireless is just one of many brands under the Verizon umbrella. Although Verizon is trading at a premium to its closest peer AT&T on forward EV/EBITDA and P/E valuations, VZ is not overvalued. This is because Verizon’s forecasted ROAs are the highest in the peer group which justifies the stock’s valuation premium, as per the peer valuation comparison below. Instead of growing in adjacent businesses where it has no expertise, Verizon is now growing on the back of 5G wireless.

And follows a dividend payment pattern similar to a lot of U.S.-based dividend-paying companies. StocksDividends.com Dividend Growth Stocks is dedicated to the process of identifying superior stocks with dividends investments, using a value-based approach. The site’s focus is on stock analysis, dividend & value education, retirement planning and developing a positive winning attitude in life over. Like I mentioned, the dividend yield currently is 4.83%. Based on Verizon’s own 5-year dividend yield average of 4.44%, there is a potential upside. For example, if Verizon were to return to its dividend yield 5-year average, the price target would be $57.21.

I use a number of the metrics and the dividend investing information discussed in this article. Specifically, historical dividend growth rates, dividend payout ratios, dividend policy, and business fundamentals. Verizon is not a growth stock that will make you rich in a decade if you put all your money into this stock. However, Verizon is a solid, stable stock that will provide you with about 8 – 10% annual return for the foreseeable future.

Verizon Dividend History

EV/Sales ratio is 18.2% higher than the 2.45 industry average. In a race for market share, as AT&T is at 34% — right behind Verizon. Weakness in the media segment was driven by declines in desktop advertising.

I use a DDM analysis because a business is ultimately equal to the sum of the future cash flow that that business can provide. $3.13 billion cash payment along with 57,596,544 shares of Verizon stock. AT&T’s forward dividend yield of 5.49% beats Verizon’s 4.14% yield, but both companies are sitting on mountains of debt.

So, the company’s earnings growth has slowed down over the past five years. We see now why the dividend growth rate has also slowed down. This fact tells me that the management team is being conservative with the dividend growth policy, which is a good thing, in my opinion. Also, this is a critical point about the company’s dividend that I think is very significant. Verizon continued to pay its dividend during the most challenging period in the last 100 years. Most businesses and industrials werecutting or suspending their dividendspayments the previous year during the COVID-19 pandemic; Verizon continued to pay its dividend.

Verizon Dividend Payout Ratio

Current 4G speeds are 150Mbps, with 4G LTE-A speeds reaching as high as 1Gbps, although the real-life speeds end up closer to 15Mbps in the field. Not only are Verizon’s 5G Ultra-Wide Band speeds estimated to reach up to 10Gbps , but latency drops from 50ms to 1ms, leading to better service. As mentioned above, Verizon has vested interests in key sectors of internet technology.

But while the S&P 500 continued to rise in the second half of 2020, Verizon stalled out. In December 2020, Verizon’s stock reached its highest post-pandemic level of $61.95. This site’s only purpose is information & entertainment. To me, Verizon stock is most attractive when it yield at or slightly about 5%. This is due to significant annual charges for pension-related expenses and merger and acquisition costs.

Also, it is important to note that the wireless segment accounts for virtually all of Verizon’s profits. Fortunately, Verizon has divested much of the wireline business over the past decade. Growth in wireless revenue is mostly offset by declines in the legacy wireline business.

Verizon reported flat growth in its business and consumer segments, with a decline in the media segment. Verizon is initially charging $50 per month for 5G Home for existing wireless customers, which is very competitive with cable. If the company can attract 10 million customers, that would be $6 billion in incremental revenue growth on the existing network. That could be a huge win, and a game changer for the business. Verizon stock has an extremely low P/E ratio and a high dividend yield.

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Other market data may be delayed by 15 minutes or more. But Verizon “has taken steps to ensure it remains well positioned in the traditional wireless business,” Hodel said. © 2022 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions. Information is provided ‘as-is’ and solely for informational purposes, not for trading purposes or advice, and is delayed.

There are risks, like competition from lower-priced operators and Verizon’s $141.6 billion in unsecured debt, but I think the strong earnings and value for investors outweigh the risks. That’s why Verizon is a dividend stock I’ll keep in my portfolio. And while we aren’t seeing much impact from a broad 5G rollout yet, we are starting to see some progress towards all three. For now, Verizon is likely to remain a more stable and reliable dividend stock than its competitors. You’re unlikely to see massive returns or a spike that outperforms the market, but your investment will yield steady dividends.

Year-to-date in 2021, Verizon Communications’ share price declined by -4.0%, while the share prices of AT&T and T-Mobile US increased by +0.6% and +8.0%, respectively. In the last one year, Verizon’s stock price rose marginally by +0.4%. In comparison, T-Mobile US’ stock price grew by +36.3% in the past year, and AT&T’s stock price decreased by -4.6% over the same period. Investors have been concerned about the cost of building out wireless networks and the $52.9 billion it spent last year just to increase its spectrum. In a world where software is king, capital-intensive businesses like telecommunications are out of favor.

The company’s assets help it outperform competitors like AT&T, T-Mobile, and Comcast, which are weighed down by their exposures in other industries. Secondly, Verizon had an impressive dividend payment track record, and it has historically offered a decent dividend yield. Firstly, Verizon’s revenue, earnings and cash flow have been resilient in FY 2020, despite the negative impact of the coronavirus pandemic. VZ’s top line declined by only -2.7% last year, while its non-GAAP diluted earnings per share and operating cash flow grew by +1.9% and +16.8%, respectively in fiscal year 2020. VZ’s recent stock price performance has been disappointing on both an absolute and relative basis.

But now, let’s get on with our review of Verizon, Verizon stock, and the Verizon dividend. I will start with several key takeaways from the Verizon stock dividend analysis. The stocks are pulled from the Morningstar Dividend Yield Focus Index, which tracks the top 75 high-yielding stocks that meet the firm’s screening requirements for quality and financial health. The Morningstar list includes companies with safe dividends who are undervalued by the firm’s estimates. If you want a leading investment research and portfolio management platform with all the fundamental metrics, screens, and analysis tools that you need. Read myReview of Stock Rover.Note that I am an affiliate of Stock Rover.