Why Verizon Is a Dividend Investor's Dream
Verizon (NYSE: VZ) stock has experienced struggles amid slow growth and high costs to deploy its 5G network. However, one area where Verizon has shined is in maintaining a growing, high-yield dividend. Although competition in the 5G market will likely require massive investments and continuous improvements, the company should continue to generate the cash flow needed to maintain and increase the payout. Here's why.
Verizon has paid a dividend since before it began operating as Verizon in 2000. Today, shareholders receive $0.6275 per share every quarter, or $2.51 per share annually. At today's price, that amounts to a cash return of just over 4.3%, more than triple the S&P 500's average cash yield of around 1.4%.
In 2020, Verizon generated $18.3 billion in free cash flow when including spectrum and acquisition costs. This came in well above the payout costs of just over $10.2 billion. These cash flows leave Verizon well-positioned to maintain and increase this payout.
Source Fool.com
