Why Verizon's Dividend Increase Might Actually Be Reason to Sell the Stock

Part of the reason to own stocks in general is protection from inflation. After all, while a bond's coupon is fixed, a stock's earnings should, hopefully, grow. Ideally, it would be a high-quality company with pricing power, that can either retain pricing and grow, or raise prices without sacrificing customers. That should lead to rising dividends and share repurchases over time.

(NYSE: VZ) shareholders may have been happy they got an expected annual bump in the company's dividend this month. However, the magnitude of the raise left much to be desired; in fact, it may actually be reason to sell the stock.

Verizon just announced it would be raising its dividend for the 17th straight year. And while that is a notable milestone, the 1.9% increase wasn't much to write home about, especially following the 1.9% increase from last year.

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Source Fool.com