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Is This 4.9% Dividend Yield Still A Buy?

Apr. 02, 2018 12:39 PM ETVerizon Communications Inc. (VZ)20 Comments
Apothémata Stocks profile picture
Apothémata Stocks


  • Verizon has managed to maintain a dividend yield above 4% for the better part of this last decade.
  • Verizon said that it added 1.2 million retail postpaid net customers in the fourth quarter as its 2017 net adds showed growth of 1.8 percent.
  • Verizon’s forecasted earnings are for 21.69% increase this year, but averaging off to a 5.41% over the next years.

Verizon’s (NYSE:VZ) closing price on March 29, 2018, was $47.82. Based on that closing price, Verizon has a market cap of $188.8 billion—the second-largest among all major US wireless service providers. Verizon’s 52-week low stands at $42.80, while its 52-week high is $54.77.

Source: mainepublic.org

Verizon has managed to maintain a dividend yield above 4% for the better part of this last decade. Its business model is overall very attractive and even with its revenue being slightly down it has managed to keep its head above water by increasing its net income. It has managed to lower its payout ratio over the last few years and continues to remain very competitive with its dividend yield being at 4.9%. As such, I would still consider Verizon to be a buy at this time because it has a competitive dividend yield with a long history of increases.

The company has continued to perform well over the past few years. It subscriber rate has increased. Verizon said that it added 1.2 million retail postpaid net customers in the fourth quarter as its 2017 net adds showed growth of 1.8 percent.


Source: statista.com

Its churn rate has continued to be one of the lowest rates amongst the four major carriers as seen in the graph below.


Source: marketrealist.com

The average revenue per user of Verizon Wireless was at 54.67 U.S. dollars. This compares to AT&T ARPU being $51.12 and T-Mobile at $43.14.

Revenue growth increased by 4.99% last year to $33.96 million. It's net income growth increased by 315.33%. Its earnings per share increased by 315.55% from $3.22 to $7.37 between 2016 and 2017.

Verizon increased its dividend last summer from $0.5775 to $0.59. It currently holds a dividend yield of 4.9% which is too attractive to not pass up.

Verizon’s dividend yield is

This article was written by

Apothémata Stocks profile picture
I am a web designer who got into the stock market about a year ago. My focus is on stocks that are rising that are backed by companies who have a solid history of producing growth for their shareholders. My focus is to find stocks that will continue to produce sustainable dividends because they are backed by companies who have strong cash flow. Finding growth and sustainable stocks is what my focus is on.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (20)

richjoy403 profile picture
VZ (and T), of which I am long, have been suffering 'out of favor' disease.

Though I have full positions in both, I'm topping them up on the basis they are undervalued, and mostly domestic--thus little FOREX risk, combined with generous income and total return potential.

Cuip99 profile picture
Long in in VZ and T. Waiting for the shoe to drop at T. I think things will be good in the telecom sector for time to come.
Sold about half my VZ at a nice profit... still holding the balance of the VZ but shut off the DRIP. If it drops by about 20% (and thus increased yield) I will turn the DRIP back on but will not be a happy camper if I have to sell at depressed levels.
#CloudsOFLie profile picture
Long VZ
Good information...am confused by term "price" used in explanation of Consecutive Years Of Dividend Yield Increases chart. Please explain what "price" means.
Frontier Man profile picture
VZ has been was looking at getting back into Florida. But only wanted the FIOS that Frontier has and not the land lines. Article from 1/30/18 "Verizon: Next Gen Fiber Broadband Era to Begin with Tampa NG-PON2 Trial" link to article http://bit.ly/2pZNBA6
Frontier Man profile picture
I look for VZ to test the low of $45.49 in the next couple of days then the yield woud be 5.187%. Being a technical person, with the low of $48.37, the low of $47.50, and the low of $46.20 in a good line, along with the "Slow STO at %K(5), %D(1) at 55.70 and dropping. Just my thought.
Lynn Costlow profile picture
Author - Assume by “price” you mean dividend rate? Never heard of “price” used that way.
If a recession is around the corner then the debt burden and sustainability of the dividend will be called into question which is why it yields over 5%
Other Side Of Trade profile picture
Long VZ and T, but to say that VZ has a good business model is a stretch: extremely competitive business, customers always demanding more for less, massive network investment and innovation needed year in/year out, huge debt. T has similar problems, but at least the 4G/5G bit is only a part of their business. I'm hoping for a "value rotation" to get out of this one.
VZ's real story is growth. Expect that in 2018.
P/E ratio is one of the best to be found in the equity markets.
Veritas1010 profile picture
I hold it, but my money is still on AT&T.

Where is the growth strategy here? Just beat T to 5G and cobble high tech has beens and never wheres?

McAdams has done a very questionable and debately job as a CEO.
marriottmare profile picture
Stay long Vz! (Watch for 5G very soon)...
Joseph Oppenheim Investing profile picture
Nothing is a buy now. The DOW is down about 12%. I’l only buy more if it drops about 15% before adding to my 18 stock DGI portfolio.
$46.82 today and over 5% yield
Dumped both VZ cell and home service after getting repeatly scammed by them. Still smarting over the Yahoo disaster. What about Fleetmatics? Holding VZ,but just bought more T today with Trump's crash.
What does "Yahoo disaster" mean? It has been some months, but last time I looked, Yahoo was the 3rd most visited website in the world. And call it an amazing coincidence, but as soon as Verizon bought Yahoo, Yahoo turned into an ultra-liberal propaganda website. I'm not sure what Verizon's agenda is there, but I don't think the people running Verizon consider Yahoo to be a disaster. And neither do I. Long VZ (not a fan of their politics though!)
I echo the liberal rag site yahoo turned out to be. Don’t use them as my homepage anymore. I can’t stomach them
The only ones who benefited from Yahoo were Marissa & Lowell.
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