7 Best Stocks to Buy for Passive Income

2. Verizon Communications Inc. (NYSE:VZ)

Number of Hedge Fund Holders: 67

Dividend Yield as of September 16: 6.10%

An American multinational telecommunications company, Verizon Communications Inc. (NYSE:VZ) ranks second on our list of the best stocks to buy for passive income. The company offers a wide range of communications, technology, and entertainment products and services to its consumers. It has been growing its 5G network since it was first introduced five years ago. With a strong spectrum portfolio and a widespread fiber optic network, the company claims to offer the most reliable 5G service in the U.S., covering over 200 million people. Verizon Communications recently revealed plans to acquire fiber-optic internet provider Frontier Communications in an all-cash deal valued at $20 billion, aiming to expand its subscriber base. This move will also strengthen its position against competitors AT&T and T-Mobile, who are focusing on unlimited plans and bundled services. Since the start of 2024, the stock has surged by over 15%.

Verizon Communications Inc. (NYSE:VZ) reported strong earnings in the second quarter of 2024. The improvements seen, both sequentially and year-over-year, reflected the company’s operational excellence and efforts to provide customers with greater choice, value, and control in their lives. The company reported a revenue of $33 billion, up 0.61% from the same period last year. Its total wireless service revenue of nearly $20 billion also showed a 3.5% YoY increase.

Verizon Communications Inc.’s (NYSE:VZ) strong cash flow is another key factor that has caught the interest of investors. In the first six months of the year, the company reported an operating cash flow of $16.6 billion and its free cash flow for the period came in at $8.5 billion. The free cash flow grew from $8 billion in the prior-year period.

On September 5, Verizon Communications Inc. (NYSE:VZ) declared a 1.9% hike in its quarterly dividend to $0.6775 per share. This was the company’s 18th consecutive year of dividend growth, which makes VZ one of the best stocks to buy for passive income. As of September 16, the stock has a dividend yield of 6.10%.

Verizon Communications Inc. (NYSE:VZ) was a part of 67 hedge fund portfolios at the end of Q2 2024, the same as in the previous quarter, according to Insider Monkey’s database. The stakes held by these hedge funds have a collective value of over $1.5 billion.