This represents a $2.66 annualized dividend and a dividend yield of 8.21%. The ex-dividend date of this dividend is Friday, October 6th. This is an increase from the stock’s previous quarterly dividend of $0.65. Verizon has 4.198 billion shares of common stock outstanding. The company made $10.4 billion in cash dividend payments in 2021. While it is always good to see a solid dividend yield, we should also consider whether the payment is feasible.
You will also find an interesting calculation before going deep into the report. The Motley Fool recommends T-Mobile US and Verizon Communications. In addition, Verizon’s debt load stood at $131.4 billion as of last quarter. To the company’s credit, it has begun to pay that down slowly, with net debt down by about $4 billion over the past year. But with interest rates now much higher than they were over the past decade, refinancing maturing loans may be more expensive, making debt pay-down more of a necessity. If the dividend continues along recent trends, we estimate the payout ratio will be 48%, which is in the range that makes us comfortable with the sustainability of the dividend.
By indexing both of Verizon’s net debt and total assets to a 100 in 2003, we could see that there were two major events that led to this high debt load. The first, as I mentioned earlier, was the increase following the Vodafone deal and the second was during this calendar year. The reason for the massive jump in shares outstanding was the Forex arbitrage $130bn transaction to acquire Vodafone’s (VOD) 45% interest in Verizon Wireless. Over the recent years, and especially following the pandemic, the gap between high duration growth stocks and less exciting value stocks has grown rapidly. The next Verizon Communications Inc dividend will go ex in 5 days for 66.5c and will be paid in 1 month.
Certain financial information included in Dividend.com is proprietary to Mergent, Inc. («Mergent») Copyright © 2014. Reproduction of such information in any form is prohibited. With a much-needed dividend cut, a major spin-off of its media properties and…
- After all, while a bond’s coupon is fixed, a stock’s earnings should, hopefully, grow.
- Firstly, it provides a new revenue stream from 5G mobile edge computing for both public and private clouds.
- However, Verizon Communications has only grown its earnings per share at 4.9% per annum over the past five years.
- Increasing debt load is one area of concern for many potential shareholders.
- Discover dividend stocks matching your investment objectives with our advanced screening tools.
- Verizon is the US’s 24th largest company by revenue and a member of both the S&P 500 and the Dow Jones Industrial Average.
As we’ll see in the next section, this also resulted in a massive debt increase for the company. As much as it diluted shareholders and increased financial risk, the deal made sense for long-term owners of the company. Firstly, it brought all assets under one roof for zero integration risk, which is significant in any outside acquisition. Secondly, Verizon’s assets are arguably one of the most attractive ones in the telecoms space as the company is one of the most profitable and largest telecoms in the world (see below). Lastly, U.S. telecoms are at a significant advantage to their European peers, which operate in a more fragmented and regulated market. Dividends are common dividends paid per share, reported as of the ex-dividend date.
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Of note, last quarter’s dividend payment took up an even higher percentage of Verizon’s free cash flow, at 68.8%. That’s because Verizon’s capital expenditures to improve its network exceeded its depreciation, leading to cash flows lower than net income. Verizon has approximately 4.2 billion shares of common stock outstanding.
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. 13 analysts have issued 1-year price objectives for Verizon Communications’ stock. Their VZ share price forecasts range from $36.00 to $64.00. On average, they predict the company’s stock price to reach $43.40 in the next year.
This trading strategy invovles purchasing a stock just before the ex-dividend date in order to collect the dividend and then selling after the stock price has recovered. Many investors believe, choosing a dividend paying stock helps with steady income apart from possible capital gains. The results above led to a 3.5% revenue decline for Verizon last quarter, although services growth did manage to eke out a small 0.8% gain thanks to price increases. Still, that was below the service revenue growth of both AT&T and T-Mobile.
But the growth picture has been difficult for Verizon in a much more competitive environment. Verizon Communications updated its FY 2023 earnings guidance on Tuesday, July, 25th. The company provided earnings per share guidance of $4.55-$4.85 for the period, compared to the consensus EPS estimate of $4.68. Verizon Communications’ stock was trading at $39.40 at the start of the year. Since then, VZ shares have decreased by 17.7% and is now trading at $32.41. Indeed, spending on wireless licenses has been significant over the past year, but more on that later.
The Verizon Newsroom greatly values transparency and we’re committed to setting the industry standard for corporate communications. By integrating blockchain technology, we’re able to permanently log all changes made to official releases after publication. Prior to this date, the stock was trading as Bell Atlantic. The dividends have been adjusted to account for any stock splits that have occurred. Get stock recommendations, portfolio guidance, and more from The Motley Fool’s premium services. U.S. inflation was 8% in 2022, and while it has improved markedly in 2023, the latest consumer price index (CPI) reading still put inflation at 3.7% year over year.
Dividend Strength
Schedule monthly income from dividend stocks with a monthly payment frequency. Stocks Verizon Communications Inc.(VZ) and Accenture plc(ACN) are similar in terms of market cap compared to Verizon Communications Inc (VZ) stock. You already know VZ has paid 96 dividend payouts since Jan 06, 2000. Meanwhile, with higher long-term bond yields these days, investors can get similar yields from corporate bonds, while being safer up the capital structure. More cash would be available for future dividend increases if Verizon were growing.
Verizon Communications (VZ) Stock Forecast, Price & News
If you are a dividend investor, you might also want to look at our curated list of high yield dividend stocks. The bigger question might not be why the payout increase is so small, but why Verizon chose to raise it at all, given recent struggles. This may be a case of attempting to satisfy shareholders that have become accustomed to their yearly price increase. Alternatively, email editorial-team (at) simplywallst.com.This article by Simply Wall St is general in nature.
Sector Performance
Volatility profiles based on trailing-three-year calculations of the standard deviation of service investment returns. Of course, the past two years have seen outsize inflation. But even the Federal Reserve’s long-term target for inflation is 2%, which is still higher than the last couple of dividend increases for the telecom giant. Over the years, Verizon has expanded its territory and its offerings to include mobile, internet and entertainment. Among the more notable were the purchase and merging of AOL and Yahoo! which were later spun off in a sale to Apollo Global Management. Among the more important changes the company has made was to sell off its land-based wirelines.
Also, during the last auction, Verizon spent the highest amount on wireless licenses relative to its size, dwarfing its two main peers in the United States. Telecom carriers, which are quite limited in their growth opportunities, have been punished. In addition, those companies now need to spend heavily on spectrum lithium stocks to buy licenses and new generation cellular and fixed networks which puts further pressure on their capital allocation. Chairman and CEO Hans Vestberg said, «With our network-as-a-service foundation and our execution on all five vectors of growth, we remain committed to delivering value to our shareholders.»
Learn more about dividend stocks, including information about important dividend dates, the advantages of dividend stocks, dividend yield, and much more in our financial education center. A steady dividend schedule is a reflection of the financial strength of a stock. At the same time, one should never forget that high growth companies (usually, tech firms) may choose to invest the earnings in future projects. © 2023 Market data provided is at least 10-minutes delayed and hosted by Barchart Solutions.
Verizon Communications and Realty Income, two strong dividend stocks, again trended this week. Build conviction from in-depth coverage of the best dividend stocks. Do you want to know how often VZ has been Faithful Finance paying dividends? Since Jan 06, 2000 there have been 96 dividend payouts. Does Verizon Communications Inc (VZ) stock pay dividends? In this post, you will find the past dividend dates and payouts.