2. Verizon Communications Inc. (NYSE:VZ)
Number of Hedge Fund Holders: 57
Dividend Yield as of January 24: 6.85%
Share Price as of January 24: $39.54
Verizon Communications Inc. (NYSE:VZ) is an American multinational telecommunications company. It recently announced its Q4 2024 earnings and posted revenue of $35.7 billion, which showed a 1.6% growth from the same period last year. Revenue growth was driven by strong customer additions in both mobile wireless and internet services. In the mobile wireless segment, the company gained 568,000 net postpaid phone subscribers during the quarter, a notable increase from the 449,000 net additions recorded in the same period last year. Revenue for this segment grew 3.1% year-over-year, reaching $20 billion, marking the 18th consecutive quarter of growth.
Verizon Communications Inc. (NYSE:VZ)’s cash generation also came in strong in FY24. The company reported an operating cash flow of $37 billion and its free cash flow came in at $19.8 billion. The free cash flow showed growth from $18.7 billion in the prior-year period. Analysts are providing an optimistic outlook for the company as it has partnered with NVIDIA to develop an AI-driven enterprise solution that enables various AI applications to operate efficiently on its secure 5G private networks with private Mobile Edge Computing. The company is also exploring other AI-based initiatives, including network slicing and satellite connectivity, to create new revenue opportunities and enhance its competitive position.
In December 2024, Verizon Communications Inc. (NYSE:VZ) declared a quarterly dividend of $0.6775 per share, which was in line with its previous dividend. Overall, the company has been raising its payouts for 18 consecutive years, which makes VZ one of the best dividend stocks on our list. The stock supports a dividend yield of 6.85%, as of January 24.
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.”
According to Insider Monkey’s database of Q3 2024, 57 hedge funds owned investments in Verizon Communications Inc. (NYSE:VZ), worth over $3.2 billion in total. Rajiv Jain’s GQG Partners was the company’s leading stakeholder in Q3.
