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Dividend Stock to Multiply Fixed Income: Verizon Communications

Telecom operators stay in line with the big banks and are considered great fixed income producers too

As the pandemic arrived, it’s become hard to make fair income from your portfolio. A wide range of blue-chip companies followed one of the next scenarios: either temporarily prevented their payouts or cut them to preserve cash. 

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If you are one of those cautious people who wish to secure their future, or wish to stick to fixed income payouts from your holdings. Usually it is not easy to find many high-yielding opportunities with which you could make a stable income stream. 

Indeed, many investors also meet an interest-rate environment in which some of the safest assets, like government bonds and bank saving accounts, are making for them close to nothing. The yield on the 10-year Treasury bond, for instance, is about 1.7%, which doesn’t really compensate for inflation.

In such an unstable environment, we advise yield-seeking investors to keep an eye on companies with solid balance sheets that have stabally reached dividend increases, rather than stocks with the most impressive overall dividend yields. 

Below we focus on a dividend stock that we believe can increase its dividends and provide a stable income stream to investors in such low-rate conditions. 

Verizon Communications

  • Market Cap: $244 billion
  • Quarterly Payout: $0.71
  • Dividend Yield: 4.5%

Telecom operators stay in line with the big banks and are considered great fixed income producers too. It doesn’t matter which direction the global economy takes, internet and wireless connections would most surely remain in great demand and would be the last items consumers take off from their must-haves. This stability and predictability increases their income appeal, especially for long-term investors.

In this sphere, Verizon Communications (NYSE:VZ) is a great investment option, especially for long-term investors. The company may boast of a solid track record of rewarding investors with substantial payouts which have boosted since 2007. The company presently pays $0.71 a share quarterly, which makes an annual yield of 4.5%.

Verizon Communications CEO Hans Vestberg is avoiding investments in the risky fields for instance, media and focuses entirely on network growth, giving preference to innovative 5G technology that does a huge leap forward in speed, capacity and connectivity.

The company shared with its investors last month that its 5G network will include 100 million people by year-end and reach coast-to-coast coverage by 2024. That growth will assist the carrier multiple its payout growth to 4% by 2024.

Telecom shares usually do not offer hefty capital gains. However, stocks of this category are defensive in nature and assist retirees in times of economic instability. 

 

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