Here's How Many Shares of Verizon Communications You Should Own to Receive $5,000 in Annual Dividend Income

Yahoo

11-05-2025

The calculation to determine how many shares of Verizon are needed to make $5,000 in annual income is straightforward.
However, the number is a moving target because of the strong possibility that Verizon will increase its dividend.
Verizon offers investors more than a dividend, too, as evidenced by its market-beating performance in 2025.
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Verizon Communications (NYSE: VZ) is known for many things. High-speed internet. An extensive network. Reliable coverage. But if you're an investor, probably the main thing you think of when Verizon is mentioned is the company's dividend.
Because of its ultra-high dividend yield, Verizon is popular with income investors. You might be surprised how much income a not-too-huge stake in this telecommunications stock can generate. Here's how many shares of Verizon Communications you should own to receive $5,000 in annual dividend income.
Verizon currently pays a quarterly dividend of $0.6775 per outstanding share. That translates to $2.71 in annual dividend payments for each Verizon share you own.
Now, let's determine how many shares you'd need to own to receive $5,000 in yearly dividend income. The math is straightforward. All we need to do is divide $5,000 by $2.71 per share. This gives us a result of 1,845.018 shares.
If we round this number down and you bought 1,845 shares of Verizon, your annual income would be a nickel short of the target $5,000. If you round up and buy 1,846 shares, your annual income would be $5,002.66. If you want to make exactly $5,000, you'd need to use fractional shares (although I doubt many investors care about being that precise).
Regardless of the exact number of shares you purchase, you'll need a significant upfront investment. To make in the ballpark of $5,000 in annual dividend income, you would have to buy around $81,000 of the stock.
However, it's important to note that the number of Verizon shares you need to own to receive $5,000 in annual dividend income could be a moving target. The primary variable is the amount of Verizon's quarterly dividend payment.
Verizon has increased its dividend for 18 consecutive years. The telecommunications giant announced its most recent dividend hike in September 2024. If it raises the dividend payout again later this year, you won't have to own as many shares to make $5,000 in annual income.
How likely is it that Verizon will keep its streak of dividend increases going? I think the chances are very good. Verizon's dividend payout ratio is currently 64.23%. This level gives the company ample flexibility to boost its dividend in a few months if the board of directors chooses to do so.
Verizon's free cash flow also indicates a strong position for increasing the dividend. The company generated free cash flow of $3.6 billion in the first quarter of 2025, a big jump from $2.7 billion in the prior-year period. It expects to deliver free cash flow of between $17.5 billion and $18.5 billion for full-year 2025. To put that range into perspective, Verizon paid $11.2 billion to fund its dividend program last year.
CEO Hans Vestberg listed Verizon's capital allocation priorities in the company's first-quarter earnings conference call in April 2025. First on the list was to continue investing in the business. What was second? Vestberg said Verizon plans to "support and grow our dividends."
The dividend isn't the only thing that makes Verizon attractive to investors, though. The stock has been a solid winner this year, rising close to 10% while the major market indexes have declined.
One plus for Verizon is that its business should hold up relatively well under the Trump administration's high tariffs. Vestberg noted in the Q1 call "a very small portion" of the company's projected capital expenditures are exposed to tariffs. He added: "We are a U.S.-based company, investing in [the] U.S. Fiber is U.S.-centric. Everything we do with labor, product is fiber-based."
Vestberg acknowledged that tariffs could cause handset prices to increase. However, he said that Verizon isn't planning to absorb the higher costs.
Meanwhile, Verizon's business is booming. It generated industry-leading total wireless service revenue in Q1. The company expanded its broadband market share. Verizon's growth could accelerate in the not-too-distant future with the pending acquisition of Frontier Communications.
Buying 1,845 or 1,846 shares of Verizon should make you roughly $5,000 over the next year. However, you could make even more money if the stock's price increases -- which I think is likely.
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Keith Speights has positions in Verizon Communications. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.
Here's How Many Shares of Verizon Communications You Should Own to Receive $5,000 in Annual Dividend Income was originally published by The Motley Fool