Is Verizon Stock a Buy?
Verizon (NYSE: VZ) is often considered an evergreen defensive stock. It owns the largest wireless network in America, it pays a high forward dividend yield of 4.4%, and the stock trades at just 11 times forward earnings. It's also raised its dividend annually for 14 straight years.
However, Verizon has also consistently underperformed the market. After factoring in reinvested dividends, it's generated a total return of about 150% over the past 10 years. That beats AT&T's (NYSE: T) total return of less than 70%, but it's roughly half of the S&P 500's total return of nearly 300%.
Past performance isn't a reliable indicator for future gains, but investors might look at Verizon's past returns and wonder if it's smarter to simply buy a low-cost index fund that tracks the S&P 500 instead. Let's take a fresh look at Verizon's business and see if its stock is still worth buying today.
Source Fool.com
