Dividend Contenders List: Top 15

3. Verizon Communications Inc. (NYSE:VZ)

Dividend Yield as of November 11: 6.7%

Verizon Communications Inc. (NYSE:VZ) is a New York-based telecommunications company that offers services in communications, technology, information, and entertainment. Since launching its 5G network five years ago, the company has steadily expanded its reach. Backed by a strong spectrum portfolio and an extensive fiber optic network, it claims to offer the most reliable 5G service in the US, now covering more than 200 million people. In the past 12 months, the stock has surged by nearly 13%.

Verizon Communications Inc. (NYSE:VZ) has promising growth prospects ahead, especially with its $20 billion plan to acquire Frontier Communications, which would enhance its fiber network. Although the deal is still pending approval and would increase the company’s debt, it could boost long-term growth. If interest rates decline, managing debt could become easier and less concerning for investors, particularly if it continues to deliver solid performance. Third Point Management also highlighted the company’s acquisition in its Q3 2024 investor letter. Here is what the firm said:

“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.”

In the third quarter of 2024, Verizon Communications Inc. (NYSE:VZ) reported revenue of $33.3 billion, which fell slightly by 0.02% from the same period last year. In the first nine months of the year, the company generated $26.5 billion in operating cash flow. Its free cash flow for the period came in at $14.5 billion.

On September 5, Verizon Communications Inc. (NYSE:VZ) announced a 1.9% hike in its quarterly dividend to $0.6775 per share. This marked the company’s 18th consecutive year of dividend growth. The stock has a dividend yield of 6.7%, as recorded on November 11.