2 Billion More Reasons for Income Investors to Buy 6.4%-Yielding Verizon Stock
Verizon increased its full-year free-cash-flow guidance significantly, which makes its dividend more secure.
There's more to like about the stock than just the dividend.
Verizon's management team continues to do the things income investors should appreciate.
10 stocks we like better than Verizon Communications ›
Many income investors love Verizon Communications (NYSE: VZ) stock. It's easy to see why. After all, the telecom giant pays a juicy forward dividend yield of 6.4% at the current stock price. Verizon has also increased its dividend for 18 consecutive years.
The company provided its 2025 second-quarter update on July 21. And income investors now have even more to love about this ultra-high-yield dividend stock.
2 billion more reasons to buy Verizon
It might sound a little gimmicky to say that there are now 2 billion more reasons for income investors to buy Verizon stock. However, it's the truth.
Verizon increased its full-year free cash flow guidance to between $19.5 billion and $20.5 billion from its previous outlook of $17.5 billion to $18.5 billion. This extra $2 billion at the ends makes the company's dividend more secure. It also puts Verizon in an even stronger position to extend its impressive streak of dividend hikes. If that doesn't make this stock more attractive to income investors, I don't know what will.
Additionally, Verizon raised the lower end of its full-year adjusted earnings per share (EPS) growth guidance range by 1%. The company increased the lower end of its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) growth outlook range by 0.5%.
What's behind Verizon's greater optimism about the rest of the year? It in part reflects the solid results the company delivered in Q2. Verizon topped Wall Street's revenue and earnings estimates. However, the company also expects to benefit from tax reform.
More to like than just the dividend
Verizon will appeal primarily to income investors because of its fantastic dividend. However, there's more to like about this stock than just the dividend.
Value investors could find Verizon's forward price-to-earnings ratio of 8.7 intriguing. Not only is this only a fraction of the S&P 500's forward earnings multiple of 22.7, but it's also well below the valuations of other telecom leaders such as AT&T (NYSE: T) and T-Mobile US (NASDAQ: TMUS).
I doubt that growth investors will be interested in Verizon. That doesn't mean the company won't be able to grow, though. Verizon CEO Hans Vestberg noted in the Q2 earnings call that the sales funnel for AI Connect "has nearly doubled to $2 billion" since the AI-enabled network, cloud, and private fiber connectivity solutions portfolio launched earlier in 2025. I think this will continue to be a strong growth driver for Verizon as AI applications move to the edge of networks.
Verizon's pending acquisition of Frontier Communications (NASDAQ: FYBR) should boost growth, too. CFO Tony Skiadis said that Verizon "remain[s] on track for an early 2026 close" on this deal. He noted that eight states, the Federal Communications Commission, and the U.S. Department of Justice have already given their approvals to the transaction. Verizon is working with the remaining state regulatory agencies needed to finalize the acquisition.
Bet on the jockey
The additional $2 billion in free cash flow Verizon expects to generate this year wouldn't be possible if the company didn't have an exceptional management team. Income investors should take comfort in the fact that Vestberg and other executives are focused on what matters most.
During the Q2 earnings call, I counted 18 times that management used the word "discipline" to describe their approach. At one point, Skiadis said, "we're not chasing growth for the sake of growth." Vestberg mentioned that management wants to put the board of directors in a position to continue growing the dividend.
Those are the kinds of things income investors should love to hear. And while Verizon just gave 2 billion more reasons to buy the stock, perhaps the best long-term reason to do so is the old adage, "Bet on the jockey."
Should you buy stock in Verizon Communications right now?
Before you buy stock in Verizon Communications, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the for investors to buy now… and Verizon Communications wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $665,092!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,050,477!*
Now, it's worth noting Stock Advisor's total average return is 1,055% — a market-crushing outperformance compared to 180% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor.
See the 10 stocks »
*Stock Advisor returns as of July 21, 2025
Keith Speights has positions in Verizon Communications. The Motley Fool recommends T-Mobile US and Verizon Communications. The Motley Fool has a disclosure policy.
2 Billion More Reasons for Income Investors to Buy 6.4%-Yielding Verizon Stock was originally published by The Motley Fool
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
CNBC
11 minutes ago
- CNBC
More stock market records, more trade deals, more trade talks — plus, lots of earnings
The S & P 500 rose every day this past week as trade deals, both in the works and announced, lent support to the market. The index heads into the final stretch of a strong July at record highs. For the week, the S & P 500 gained nearly 1.5%. The Nasdaq did not go wire to wire in the green this week, but it did rise 1%, closing at another record high. Ahead of the last trading day of the month on Thursday, the S & P 500 was up almost 3% for July, while the Nasdaq jumped 3.6%. The best session of the week came on Wednesday after President Donald Trump announced the night before what he called a "massive" trade agreement with Japan ahead of the Aug. 1 deadline. The deal settled on a 15% tariff on goods entering the United States from Japan, including automobiles. In exchange, Japan will invest $550 billion in America and open its market to more imports from the U.S. The trade focus now shifts to China and the European Union. Next week, Treasury Secretary Scott Bessent travels to Stockholm for talks with Chinese officials about extending the negotiating window for a trade deal. Regarding the EU, Trump said Friday he sees only a "50-50 chance" of a deal with the trading bloc. The president plans to meet with EU officials in Scotland on Sunday. .SPX .IXIC 5D mountain S & P 500 and Nasdaq 5-day performance The other big news of this past week was Trump's trip to the Federal Reserve on Thursday. He toured the central bank renovation site with Fed Chairman Jerome Powell. They spoke with reporters and had an uncomfortable moment over renovation costs. Trump signaled that he's no longer considering firing Powell. The president told reporters Friday that Powell and he had a "good meeting" about interest rates, and he believes the Fed will start cutting them. Powell has kept rates steady since December 2024, saying central bankers need more time to see how finalized tariffs will impact inflation. On the economy, the June existing home sales report was released on Wednesday, followed by June new home sales on Thursday. While sales of both were slower than expected, the reports diverged when it came to prices. The median price of a previously owned home sold in June was $435,300, up year over year and the 24th consecutive month of annual increases, according to the National Association of Realtors. However, government data showed the median sales price of new homes sold last month was $401,800 — below May and below year-ago levels. Watching housing price trends is important because it can give us signals on where shelter costs might be headed, which have been a key factor keeping overall inflation elevated. Second quarter earnings season has kicked into full gear, with results thus far coming in better than expected. According to FactSet, a third of the S & P 500 companies have already reported, with 80% of those delivering upside surprises to both sales and earnings expectations. Within the Club portfolio, we heard from Danaher, GE Vernova, Capital One, Honeywell, and Dover. Talk about a blowout. GE Vernova came into the quarterly print near all-time highs, setting a high bar of expectations, which it easily hopped over. The stock was rewarded with record highs and was our top performer of the week, with 12% gains. Shares have nearly doubled in 2025 versus the S & P 500's 8.6% advance this year. GE Vernova on Wednesday reported strong order growth and robust EBITDA margin expansion. EBITDA stands for earnings before interest, taxes, depreciation and amortization. Strong backlog growth also gives us confidence that end market demand remains healthy. "This era of accelerated electrification is driving unprecedented investments in reliable power, grid infrastructure, and decarbonization solutions," CEO Scott Strazik said on the post-earnings call. Danaher on Tuesday delivered a strong set of results, albeit against relatively low expectations. The company did outpace expectations on the top and bottom lines, thanks to strength in all key operating segments. While Chinese sales in biotechnology and life sciences grew, the positive numbers were overshadowed by sustained weakness in diagnostics due to the countries volume-based procurement program. The quarter was enough to spark a relief rally and keep us in the name. Danaher was our second-best performer this week, rising 8%. Despite a good week, the stock was still down 10.5% year to date. Capital One delivered a noisy quarter on Tuesday due to the Discover integration. While shares were among our losers this week, down 2.5%, they have been on a roll, up more than 19% year to date. We saw enough the quarter to reaffirm our view that there will be some serious long-term benefits resulting from the acquisition and its payment network. Capital One is one of only two banks in the world with their own credit card network, the other being American Express. We will look for the company to leverage that edge into earnings growth and for the stock to be rewarded for it with a higher multiple as the integration progresses and management executes on their game plan. We were surprised by Thursday's more than 4% stock drop on Dover 's earnings. In addition to a top and bottom-line beat, the company reported a record adjusted segment EBITDA margin, an acceleration in bookings that provides visibility into the future. It also outlined several growth and productivity investments to support long-term growth. Compounding the strong results, management raised its full-year outlook on both revenue growth and adjusted earnings per share. For the week, Dover lost about 1%. Like Dover, Honeywell stock was also dinged after it reported Thursday morning, despite the results coming in largely better than expected. Shares were our worst performer of the week, down 5.2%. While there was some weakness in aerospace and in segment margin performance, we were satisfied with the explanation provided by management on the call and believe the weakness provides a buying opportunity ahead of what we think will be a value-creating breakup into three separate operating companies. The split will start in the fourth quarter of this year, when management spins off the advanced materials business, and continue in 2026 with the separation of aerospace, which will leave the automation business as the third public company. In the week ahead, we will get seven more Club name earnings, including Amazon , Apple , Meta Platforms , and Microsoft . (See here for a full list of the stocks in Jim Cramer's Charitable Trust.) As a subscriber to the CNBC Investing Club with Jim Cramer, you will receive a trade alert before Jim makes a trade. Jim waits 45 minutes after sending a trade alert before buying or selling a stock in his charitable trust's portfolio. If Jim has talked about a stock on CNBC TV, he waits 72 hours after issuing the trade alert before executing the trade. THE ABOVE INVESTING CLUB INFORMATION IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY , TOGETHER WITH OUR DISCLAIMER . NO FIDUCIARY OBLIGATION OR DUTY EXISTS, OR IS CREATED, BY VIRTUE OF YOUR RECEIPT OF ANY INFORMATION PROVIDED IN CONNECTION WITH THE INVESTING CLUB. NO SPECIFIC OUTCOME OR PROFIT IS GUARANTEED.
Forbes
11 minutes ago
- Forbes
Apple's Surprise Free Offer To iPhone 13 Users Is Now Live For iPhones
Updated July 26 with more details of T-Satellite. When Apple made the surprise announcement that its iPhone 13 series was suddenly compatible with carrier-supported satellite connectivity, it was ushering in a new way to stay connected. The first network to support this, T-Mobile, has just gone live with its new T-Satellite service for iPhones and other handsets. And even a temporary outage hasn't stopped the new service from arriving. More on that below. Apple iPhone 13 Pro T-Satellite works by connecting your phone to Starlink satellites (though, please note, it doesn't install Starlink on your phone as rumor-mongers previously claimed). T-Mobile's CEO Mike Sievert said in a post on X, 'Today marks a huge step in @TMobile's mission to end dead zones. T-Satellite is officially out of beta and available to anyone who wants it — including Verizon and AT&T customers,' he exclaimed. That's an important point: subscribers on other networks can sign up to T-Satellite by paying a monthly fee. Note that Verizon and AT&T are expected to offer their own versions of this service, but for now, T-Mobile has first-mover advantage. 'With 650+ satellites in orbit, the largest satellite-to-mobile constellation on the planet aims to connect you almost anywhere you can see the sky. It's already helping save lives during disasters and providing an extra level of safety for those who love to explore the great outdoors,' Sievert goes on. The service is available for compatible handsets, and that includes most current Android phones as well as all iPhones from iPhone 13 onwards. It went live on Wednesday, July 23, right on schedule — though had already been offered to customers impacted by the recent floods in Texas — and the new service has been called a game-changer because, unlike rival satellite options, including Apple's own Globalstar service, it doesn't require users to point their phone at the satellite. It works just like regular cell connections do, even in your pocket. The next day, Thursday, July 24, Starlink experienced an outage for more than two hours, with full service more or less restored by 5 p.m. Pacific the same day. "The outage was due to failure of key internal software services that operate the core network," Starlink's VP of engineering Michael Nicolls said on X. Not much more is known now, though it's believed it affected tens of thousands of people, some of whom could have been T-Satellite users. By Friday, July 26, SpaceX, which runs Starlink, was searching for the root cause of the issue. Users in the U.S. and Europe were affected and Downdetector, the crowd-sourced outage tracker claims that as many as 61,000 people reported issues. It even affected Ukraine, where combat operations saw the service go down. The cause, it was speculated, could have been a botched software update, a cyberattack or some other kind of glitch. If T-Mobile is your carrier and you have the Experience Beyond service, you get this new capability included. Others, including AT&T and Verizon customers, can access the service for $10 per month. The T-Mobile satellite service is limited to texting with iMessage and SMS, and data is not supported, though more capabilities may follow. The T-Satellite service means that if you are outside the regular cellular network, your phone is able to remain connected via satellite, for text messages on compatible iPhones and Android handsets. More services will be added in due course but already other features are available to Android users, including multimedia messaging, picture messaging, and short audio clips. For now, this is the beginning of a new way to stay in touch wherever you are, even if your phone is in your pocket.
Yahoo
39 minutes ago
- Yahoo
Newmont (NEM) Jumps 6.89% on Better Income, Dividend News
We recently published . Newmont Corporation (NYSE:NEM) is one of the best-performing stocks on Friday. Newmont rallied for a second day on Friday, jumping 6.89 percent to close at $65.75 apiece as investor sentiment was bolstered by an impressive earnings performance and news that it will distribute cash dividends to its shareholders. In its earnings release, Newmont Corporation (NYSE:NEM) said net income attributable to shareholders in the second quarter of the year jumped by 142 percent to $2.06 billion from $853 million in the same period last year. Adjusted EBITDA also rose by 52 percent to $2.997 billion from $1.966 billion. Additionally, attributable gold production ended lower by 8 percent during the period at 1.48 million ounces versus 1.61 million ounces year-on-year, driven by the previously announced closing of non-core asset sales. However, the closure was partially offset by higher production from four other sites. Copyright: tomas1111 / 123RF Stock Photo The average realized gold price increased by 41 percent to $3,320 from $2,347 year-on-year. In other news, Newmont Corporation (NYSE:NEM) also declared a $0.25 cash dividend to each common shareholder as of September 4. The dividends will be payable on September 29. While we acknowledge the potential of NEM as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the . Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
