Verizon Exits Dow Jones, Maintains Strong Dividend Yield
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6 days ago
0mins
Source: Fool
- Dow Jones Component Change: Verizon was replaced by Alphabet in the S&P Dow Jones Index, ending its 22-year tenure, yet it still boasts a dividend yield exceeding 6%, highlighting its appeal among income investors despite the index shift.
- Robust Cash Flow: Verizon's first-quarter free cash flow rose 4% year-over-year to $3.8 billion, with full-year guidance exceeding $21.5 billion, comfortably covering its annual dividend expense of about $12 billion, indicating strong financial health.
- Subscriber Growth Recovery: Verizon added 55,000 postpaid phone subscribers and 341,000 broadband connections in the first quarter, marking its first positive growth in this metric since 2013, suggesting a business turnaround with promising future growth potential.
- Debt Management Challenges: Although Verizon's net debt reached $130 billion post-Frontier acquisition, raising leverage to 2.6 times, management has repaid half of Frontier's debt and expects to clear most of the remainder by year-end, demonstrating a commitment to financial stability.
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Analyst Views on VZ
Wall Street analysts forecast VZ stock price to rise
14 Analyst Rating
4 Buy
10 Hold
0 Sell
Moderate Buy
Current: 42.070
Low
43.00
Averages
46.42
High
51.00
Current: 42.070
Low
43.00
Averages
46.42
High
51.00
About VZ
Verizon Communications Inc. is a holding company. The Company, through its subsidiaries, provides communications, technology, information and streaming products and services to consumers, businesses and government entities. Its Consumer segment provides wireless and wireline communications services. It also provides fixed wireless access (FWA) broadband through its 5G or 4G Long-Term Evolution (LTE) networks portfolio. The Company's Business segment provides wireless and wireline communications services and products, including FWA broadband, data, video and advanced communication services, corporate networking solutions, security and managed network services, local and long-distance voice services and network access to deliver various Internet of Things (IoT) services and products. It provides these products and services to businesses, public sector customers and wireless and wireline carriers across the U.S. and a subset of these products and services to customers around the world.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Earnings Growth Outlook: Analysts project Verizon's EPS to reach $5.27 in 2027; while mid-single-digit growth may seem modest, if the company can maintain steady profit growth, the stock could rise in line with earnings growth, potentially achieving a higher forward multiple.
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