7. Verizon Communications Inc. (NYSE:VZ)
Number of Hedge Fund Holders: 57
Dividend Yield as of January 20: 6.99%
Verizon Communications Inc. (NYSE:VZ) ranks seventh on our list of the best dividend stocks. The American multinational telecommunications company plays a significant role in advancing the AI sector through its 5G wireless network, which provides the speed and security needed to bring AI to edge devices like laptops and smartphones. One example of the company’s involvement in AI edge computing is its collaboration with Nvidia to deliver AI capabilities to private networks, which are tailored wireless services for specific organizations. For example, Verizon is set to provide a private network for FIFA during the 2026 Men’s World Cup.
In the first nine months of 2024, Verizon Communications Inc. (NYSE:VZ) saw a 0.9% increase in consumer revenue compared to the prior year, while business revenue declined by 2.1%, leading to an overall revenue growth of 0.3%. The recovery in the consumer segment was driven by targeted incentives, marketing efforts, and the effective implementation of strategic initiatives, including recent acquisitions. Third Point Management made the following comment about VZ in its Q3 2024 investor letter:
“While some economic activity has been showing signs of slowing, the defensive composition of the current high yield market with a high mix of higher quality credit and short duration has let the rates tailwind overwhelm such concerns. The lowest quality sectors of the market have performed best, fueled by both soft/no landing expectations, as well as two positive events in the beleaguered telecom space. Telecom/cable have been poor performers year to date due to overhang from the growth of FWA (aka “wireless cable”) and increased fiber building, however the sector re-rated materially on two deals. Second, Verizon Communications Inc. (NYSE:VZ) announced a deal to acquire Frontier Communications (FYBR), a transaction which the fund benefited from by virtue of its investment in FYBR debt. This transaction, aimed at increasing’s VZ fiber footprint, has led to broad revaluation of fiber retail networks that we think is appropriate. While we continue to expect to see FWA rapidly erode non-upgraded cable and especially copper’s share of the low-end broadband market, the VZ deal underscores the value of the higher end footprint.”
Verizon Communications Inc. (NYSE:VZ) has been a solid dividend payer because of its stable cash position. In the first nine months of the year, the company reported an operating cash flow of $26.5 billion and a free cash flow of $14.5 billion. It has also been rewarding shareholders with growing dividends for the past 18 consecutive years. The company pays a quarterly dividend of $0.6775 per share and has a dividend yield of 6.99%, as of January 20.
Verizon Communications Inc. (NYSE:VZ) was a part of 57 hedge fund portfolios at the end of Q3 2024, according to Insider Monkey’s database. The stakes owned by these funds have a consolidated value of over $3.2 billion. Rajiv Jain’s GQG Partners was the company’s leading stakeholder in Q3.
