Verizon Communications is an Overlooked Dividend Stock Income Investors 2017-06-27 07:20:53 Verizon CommunicationsVZ stockdividend paying stockNYSE:VZverizon stockdividend increasehigh dividend yielddividend hike Verizon Communications (NYSE:VZ) has increased its dividend for 10 consecutive years and might see another dividend hike because of its dividend and preservation of capital. Dividend Stocks,News,Verizon Stock https://www.incomeinvestors.com/wp-content/uploads/2017/06/VZ-Stock-Has-a-High-Dividend-Yield-of-5.09-150x150.jpg

Verizon Communications is an Overlooked Dividend Stock

VZ Stock Has a High Dividend Yield of 5.09%

Finding a dividend-paying stock is very easy to find since it only takes a few seconds searching online. But what if you also want a stock that offers both dividend income and capital preservation? While these all tend to go hand and hand, that is not always the case.

A company that pays out a dividend will have lower daily volatility compared to the overall markets. This is because returns come via both dividend income and capital gains, based on the stock price increasing. A growing dividend means volatility is reduced even further, since the market notices the growth.

One company with a stock that offers all this is Verizon Communications (NYSE:VZ). Its stock also boasts a high dividend yield, meaning an annual dividend return that is greater than the average return on the overall markets.

VZ stock is offering a dividend yield of 5.09%, paid every February, May, August, and November. It is reviewed once a year. When the opportunity does come the management ensures that the dividend is increased to ensure that a piece of the profits are given to shareholders since they are part owners of the company. Below is the table of the dividend per share (DPS) for the past five years.

Ex-Dividend Date
DPS
Change
Declaration Date
Record Date Payment Date
July 06, 2017 $0.58 N/A June 01, 2017 July 10, 2017 August 01, 2017
April 06, 2017 $0.58 N/A March 03, 2017 April 10, 2017 May 01, 2017
January 06, 2017 $0.58 N/A December 01, 2016 January 10, 2017 February 01, 2017
October 05, 2016 $0.58 2.2% September 01, 2016 October 07, 2016 November 01, 2016
July 06, 2016 $0.57 N/A June 02, 2016 July 08, 2016 August 01, 2016
April 06, 2016 $0.57 N/A March 04, 2016 April 08, 2016 May 02, 2016
January 06, 2016 $0.57 N/A December 03, 2015 January 08, 2016 February 01, 2016
October 07, 2015 $0.57 2.7% September 03, 2015 October 09, 2015 November 02, 2015
July 08, 2015 $0.55 N/A June 04, 2015 July 10, 2015 August 03, 2015
April 08, 2015 $0.55 N/A March 06, 2015 April 10, 2015 May 01, 2015
January 07, 2015 $0.55 N/A December 04, 2014 January 09, 2015 02/02, 2015
October 08, 2014 $0.55 3.8% September 04, 2014 October 10, 2014 November 03, 2014
July 08, 2014 $0.53 N/A June 05, 2014 July 10, 2014 August 01, 2014
April 08, 2014 $0.53 N/A March 07, 2014 April 10, 2014 May 01, 2014
January 08, 2014 $0.53 N/A December 05, 2013 January 10, 2014 February 03, 2014
October 08, 2013 $0.53 2.90% September 02, 2013 October 10, 2013 November 01, 2013
July 08, 2013 $0.52 N/A June 06, 2013 July 10, 2013 August 01, 2013
April 08, 2013 $0.52 N/A March 08, 2013 April 10, 2013 May 01, 2013
January 08, 2013 $0.52 N/A December 06, 2012 January 10, 2013 February 01, 2013
October 05, 2012 $0.52 3.0% September 06, 2012 October 10, 2012 November 01, 2012

The dividend has been increased for 10 consecutive years. And with approximately $0.75 of every dollar of earnings paid out to investors, future dividend hikes are possible.

Also keep in mind that Verizon is part of the oligopoly that currently controls the telecommunication sector. Sharing a large market share with only a handful of direct competitors, as well as the costs of starting a telecom business and government regulations, means new competition is unlikely. These all protect Verizon’s revenue and market share.

VZ Stock

Preservation of Capital

Preservation of capital is measured by the daily movement of the stock. The goal for investors is to find a stock that does not see much movement to the downside, in addition to the aforementioned growth.

Luckily, Verizon stock does offer the benefit of very low daily volatility on a daily basis. If the market fell by one percentage point, on average VZ stock would see a drop of approximately 0.31%. This would add up greatly as time passes; a fall for one straight week would mean a -1.55% return for VZ stock, for instance.

Also consider the return from the dividend yield, which could result in a positive return, since the total return would be based on the dividend income and stock price gains.

Also Read:

Better Stock Pick: AT&T or Verizon?

Verizon Communications Inc.: 1 Top Dividend Stock for 2017… and Beyond

Final Thoughts About VZ Stock

It’s not every day that you find a great business that offers a high and growing dividend yield. And a growing dividend is much better and faster for achieving one’s investing goals due to the higher return and income that should be earned.

The preservation of capital also helps in this regard, and important and often forgotten piece of information. After all, to turn a $100,000 investment into $200,000 requires a gain of 100%. But if the $100,000 turned into $50,000, then you would need a gain of 300%, which is, needless to say, more difficult to accomplish. By focusing on capital preservation from the get-go, you wouldn’t have to take on as much risk to meet your goals.

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