Verizon

[TonyDown]

I've been looking at Verizon for income.  The forward paying dividend is currently around %6.9.

I read several analyst reports, mostly positive.

However, one analyst recommends AVOID based on technicals, that the price has trended down.   I sense the market's lack of confidence, how the company is run, has pushed the price lower.  Perhaps that goes without saying.

Another analyst recommends SELL based on debt load, with a price target of $33.   Today it traded around $39.

Morningstar is positive although they warn of a small moat.

Argus and Schwab recommend Verizon, with encouraging price targets.

My gut tells me Verizon management's business investments do not always prove wise.  

Yet the dividend is attractive!   If the stock appreciates, as some analysts predict, even better.

Sometimes it pays to buy when a stock has dropped, but not always of course.

I'm not ready to take the plunge, until I'm confident this will be a good value investment.

Any opinion on Verizon?

 

 

Edited January 22 by TonyDown

[Beancounter]

I’ve owned VZ for decades strictly for the dividends and have reinvested those dividends to purchase more shares of VZ.  I own shares that cost me around $29 and others in the $60 range.   For me, VZ is a dividend play and nothing more.  It provides me with $6,000 annually to spend as I choose.  As long as the dividend holds I’m good with VZ.  I certainly don’t consider it a growth stock.  
 

Im not sure what your financial goals or needs are but owning VZ at its current price seems like a conservative investment and would be a nice addition to a diversified portfolio.  

[+ augustus]

VZ, like Pfizer, has a good dividend yield and a very reasonable forward P/E (less than 10).  Those are great points to consider. Many of these high-tech companies pay little or no dividends and trade at high P/E ratios.  Don't know how that's going to play out, but it didn't end well in 2000.  

[jawjateck]

VZ is basically a bond. I own it for the yield, and will continue to own it as long as they have the cash flow to pay the dividend. Because of their debt load, I pay attention to their cash flow. If it gets dicey, I'll sell it. Their earnings report is tomorrow.

[Bokomaru]

A dividend that high is a red flag for most stocks. It’s historically been closer to the upper 4 range. 

Maybe it’s so high now because the stock price is low. Sometimes when that happens it means future prospects are not great and the dividend gets slashed eventually. 

I have no special knowledge of this stock so am only speaking in general terms. Approach with caution. 

Also, bonds are paying very well now. Safer than a single stock where anything can go wrong and with pretty much  guaranteed returns. Maybe another option for you? 

[TonyDown]

3 hours ago, Bokomaru said:

A dividend that high is a red flag for most stocks. It’s historically been closer to the upper 4 range. 

Maybe it’s so high now because the stock price is low. Sometimes when that happens it means future prospects are not great and the dividend gets slashed eventually. 

I have no special knowledge of this stock so am only speaking in general terms. Approach with caution. 

Also, bonds are paying very well now. Safer than a single stock where anything can go wrong and with pretty much  guaranteed returns. Maybe another option for you? 

I recall that scenario happened with AT&T a few years ago, cutting the dividend by about half.

Frankly I don't have much confidence in either VZ or T track records. 

 

I'll always remember a New Yorker cartoon how a stock price jumped when the company announced replacing their board of directors with sacks of straw.   Can't find it now.

 

Here's one.   

Edited January 24 by TonyDown

[handiacefailure]

I own some for the dividends, but not for growth.   A real good dividend paying stock I'm happy with is Realty Investment (stock symbol O)     Not only am I realizing a terrific dividend the stock price has gone up a lot since I started investment in it.   And it pay dividends monthly.   Only thing that sucks is it's not taxed at the dividend rate since it's an REIT (good stock to own in a roth).

One stock I started to dollar cost average in is Whirlpool.   Great dividend and with people rebuildin due to a few disasters that happened recently a lot of poeple will be rebuilding and will be needing new appliances  

[+ Vegas_Millennial]

18 minutes ago, handiacefailure said:

Only thing that sucks is it's not taxed at the dividend rate since it's an REIT (good stock to own in a roth).

This is important.  I'm overweight in REIT in my Roth accounts; but, I don't have any REITs outside my Roth accounts for this reason.

[Beancounter]

On 1/23/2025 at 6:58 PM, TonyDown said:

I recall that scenario happened with AT&T a few years ago, cutting the dividend by about half.

Frankly I don't have much confidence in either VZ or T track records. 

 

I'll always remember a New Yorker cartoon how a stock price jumped when the company announced replacing their board of directors with sacks of straw.   Can't find it now.

 

Here's one.   

Yes, it’s true that AT&T cut its dividend but you only presented half of the story.  They also spun off the entertainment portion of the company in the form of Warner Brother Discovery stock when they cut their dividend.  AT&T has come full circle…..first as AT&T, then divested into the Regional Bell Operating Companies (RBOCs) and now back to AT&T.   Neither Verizon nor AT&T are going anywhere.  They’ve been around for decades and pay above average dividends.  Are they a growth stock?  No.  Like Jawjateck said….they’re more like a bond.   My mom used to call these types of stocks “little blue-haired lady stocks” because so many old women owned them solely for the dividend.  I personally believe they don’t do any harm in someone’s portfolio, in moderation of course.  

[Colton]

ATT has been doing great for the past year.  Great bond like dividend plus some price appreciation.  Can’t beat that. 
 

I have more confidence in them now than before.  

[handiacefailure]

Suze Orman recomended selling Whirlpool stock on her podcast today if you held it (she recomended buying it for the dividend a few months ago  but it tanked Friday due to the tariffs) and recomended dividing the proceeds between VZ and Pfitzer if you wanted good dividend paying stocks.   I have also owned Pfitzer for a while and am happy with the dividends.   

[TonyDown]

Full disclosure, I did end up buying Verizon shares,

but also put some cash back into a CD, 

8  month term 4.35% APY.

[Beancounter]

In light of recent market volatility I decided to check on Verizon’s performance this year.  This is what I discovered:

Jan 1 price: 40.21

Mar 10 price: $46.89

Increase of $6.68 per share - 16.6% increase YTD

It appears to have held up well.  I suspect people are parking some of their excess cash in VZ because of their relatively safe dividend return.  No crystal ball here but I personally think we’re in for a fair amount of market turmoil until things settle down regarding all the tariffs and political uncertainty .  
 

Good luck to all investors.  

[jawjateck]

Investors were piling into it yesterday for safety, then this morning an exec opens his mouth and talks about strong competition weakening the current quarter's outlook, and everybody's selling today. Fickle and funny. Gotta love these execs making remarks at meetings about the material condition of the business rather than an actual announcement to the public. Frustrating that these kinds of comments to select audiences are allowed.

I bought VZ in the mid/upper 30s and will continue to hold it as long as the cash flow supports the dividend, and 2025 appears to be OK.

Edited March 11 by jawjateck

[Kcdave]

I used to think that AT&T was a good parking lot for cash and invested heavily from 2015 until they burned me in 2021.
never got back the principal I invested in AT&T stock. Eventually sold for a loss. I’ve also owned Verizon for close to three years and I have invested overtime many different times. I don’t reinvest dividends. But I have purchased as a parking lot again Verizon shares over the last 24 months.

all I can see is be careful because your principal could be risked for that. Very nice dividend you’re receiving today.