Why Verizon Stock Is a Top Dividend Stock The Motley Fool

Why Verizon Stock Is a Top Dividend Stock The Motley Fool

Verizon’s network is the backbone for carriers like Tracfone, Straight Talk, Net10, and Xfinity Mobile, among others. Despite this wide footprint, many wonder if the stock peaked in value. I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article.

You must show patience and use this time to accumulate at a discount. VZ’s competitors are naturally trading optimistically, with a notable 25.63% and 13.01% rally from the recent bottom in mid-October, significantly boosted by their raised FY2022 guidance. It is apparent that T’s acquisition strategy has worked, putting our previous bearish sentiments to sleep. Furthermore, the company continues to report improvements in its postpaid phone ARPU by 1.6% QoQ, despite the rising inflationary pressure and worsening macroeconomics.

Furthermore, VZ may have found its sustainable rock-bottom levels here, thanks to the poorer results thus far. Therefore, bottom-fishing investors may potentially nibble at these 11Y low levels. Investors who had loaded up at previous lows would have enjoyed stellar dividend yields of 7.6% by FY2024. Naturally, investors should ignore the noise about the value destruction thus far, since VZ should not be viewed as a high-growth stock but rather as an arguably blue-chip dividend stock. As a long-term shareholder dating back to 2003, I would like to share my thoughts. On Verizon stock, the Verizon dividend yield, dividend growth, dividend safety, and much more.

is verizon a good dividend stock

Users should not base their investment decision upon StockInvest.us. By using the site you agree and are held liable for your own investment decisions and agree to the Terms of Use and Privacy Policy.Please read the full disclaimer here. Furthermore, this dividend stock investment has slowly grown into one of my larger positions. Through a combination of price appreciation, add-on purchases, and dividend reinvestment.

Verizon Debt To Equity Ratio

To see all exchange delays and terms of use please see Barchart’s disclaimer. Enter your email address below to receive the latest headlines and analysts’ recommendations for your stocks with our free daily email newsletter. By Clare Jim HONG KONG – Global investors Warburg Pincus and Greystar Real Estate Partners are pushing deeper into China’s rental housing, as a growing number of… The Motley Fool recommends T-Mobile US and Verizon Communications. The Motley Fool recommends Comcast and Verizon Communications. I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

The energy index rose 41.6% over the past year, the largest 12-month increase since April 1980. The food index increased 10.4%, the largest 12-month increase since February 1981. Smartphone additions xcritical trading platform showed growth, totaling 372,000, an increase from 2018 third-quarter additions of 285,000. Operating income for the consumer segment increased 3.8% year over year with an operating margin of 33%.

Net income of $5.3 billion showed a decrease of 10.7% from Q2 2021, and adjusted EBITDA was $11.9 billion, down 2.6% year over year. The company offers communications, technology, information, and entertainment products and services voice, data and video services and solutions on its networks and platforms. Declines in legacy wireline products offset the growth in wireless services in the business segment — showing flat results year over year. A reported gain of 12.1% in the wireless retail postpaid net additions consisted of 50.2% from phone additions, 27.4% from tablet additions, and 22.3% from other connected device additions. For the recent third quarter of 2019, Verizon announced an earnings-per-share increase of 2.5% year over year.

is verizon a good dividend stock

On the other hand, companies are not required to pay dividends. And they can change their dividend policies at any time. Now, as promised, let’s discuss Verizon’s dividend growth. VZ has a dividend yield of 6.82% and paid $2.57 per share in the past year.

The projected dividend growth rate is a little higher than its 10-year average. So, the dividend growth rate has slowed down compared to its last 10-year average. We would like to see companies grow their dividends faster than inflation and keep up with that higher dividend growth history as dividend growth investors. The slower 5-year dividend growth shows me that earnings and overall Company growth are also slowing. However, as long as the dividend increase at the rate of inflations or higher, I am a happy dividend investor.

Verizon is hoping that data-dependent mobile will be key moving forward; however, Verizon showed signs of weakness in 2017 by revamping its unlimited data plan . Shortly following Verizon, competitors moved to the unlimited plan — potentially removing a revenue component of multiple data plan offerings from the business. This is a big deal because this is incremental new revenue for Verizon. https://forexarena.net/ The company has very few broadband customers outside of its East Coast fiber network, but it has tens of millions of wireless customers. If the company can get some of those customers to switch to Verizon wireless broadband, it would be a huge win — and there’s a compelling reason to switch. Verizon has long been stuck in a valuable but small box given what it can offer consumers.

Stocks Dividends dedicated to finding high quality dividend growth stocks suitable for long-term investment. Dividend Investors share their journey with you on his quest for achieving an increasing dividend income stream from stocks with above average dividend growth. The dividend was increasedthis year was from $0.6275 to $0.64 per share. Currently, Verizon has an S&P credit rating of BBB+, a Moody’s credit rating of Baa1, and a Fitch credit rating of A-, which are investment-grade ratings.

Why You Might Choose Verizon Communications Inc. During Inflation

The dividends have been adjusted to account for any stock splits that have occurred. “We continue to believe the market is overly focused on Verizon’s struggle to add postpaid consumer wireless customers in recent quarters,” he wrote in a commentary. The most recent change in the company’s dividend was an increase of $0.0125 on Wednesday, September 7, 2022. Verizon Communications has increased its dividend for the past 17 consecutive years.

is verizon a good dividend stock

However, each company has a different strategy for its rollouts. The author of this story owns shares of Verizon and Medtronic. Receive full access to our market insights, commentary, newsletters, breaking news alerts, and more. By creating a free account, you agree to our terms of service.

On March 25, 2020, Verizon stock ultimately bottomed at $48.84. Fortunately, the stock rebounded somewhat from that point on as the broader market recovered. And I expect Verizon stock to continue to be just that. Even as we weighed the pros and cons of company dividends.

Verizon Stock Forecast

Racism, sexism and other forms of discrimination will not be tolerated. To see all exchange delays and terms of use, please see disclaimer. Mixed analyst sentiment about the stock justifies this grade.

  • Based on Verizon’s own 5-year dividend yield average of 4.44%, there is a potential upside.
  • These numbers have shown promising QoQ improvement indeed, thereby pointing to the stock’s overly-beaten state at extreme 11Y lows.
  • That could change with 5G Home, which will allow Verizon to offer wireless home broadband service nationwide.
  • Verizon stock appears suitable for initial or add-on buys on price pull-backs.

But there are solid reasons to like Verizon stock as a long-term dividend investor. The company’s core wireless business is very profitable and growing steadily. It’s added home broadband to the mix, and pays a hefty 4.7% dividend yield. I think there’s an unappreciated upside for investors from here. In the case of Verizon’s projected dividend growth, I believe the future will be much like the past. So, I am forecasting a 2% annual Verizon dividend growth rate.

An impending price war, lackluster growth, and poorly performing acquisitions put Verizon’s dividend in second place.

In addition, the company has a long-term debt/cap ratio of 65%, which is high, but reasonable considering that this sector is very capital intensive. And the interest axes broker coverage ratio of 8.7X, which is very good. Thus, the company looks to be in an excellent position and will continue to cover the dividends and pay its debt.

Conclusion on Is Verizon a Good Dividend Stock

I have 815 shares of Verizon and I am getting concerned. I want to hold for the dividends but this current slide is concerning. I also own KO, GIS, PFE, TGT, IPLDP, and VTRS but in smaller amounts. Looking ahead, analysts are expecting Verizon’s stock to rebound in the next 12 months. The average price target among the 22 analysts covering the stock is $43, suggesting a 12.5% upside from current levels. This may be an early warning and the risk will be increased slightly over the next couple of days.

This is because telecommunications companies must continuously invest in their network. At the end of Q3, 2021, Verizon had $7,515 million in current long-term debt and $143,056 million in long-term debt. This debt is offset by only $10,153 million in cash, cash equivalents, and short-term securities.

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