Verizon Stock Is a Buy -- If You Can Accept 1 Harsh Reality
Verizon Communications (NYSE: VZ) stock has appeared to become a buy. After enduring a three-year downtrend, the stock has gained about 25% from its October low.
However, its dividend is in danger of being cut. After 17 straight years of increases, the yield and dividend costs have risen to elevated levels as its ongoing costs have risen. Hence, while Verizon is probably a buy, one should prepare for a reduction and possible elimination of the dividend. Here's why.
Aside from T-Mobile, which recently introduced a payout, telecom stocks like Verizon and AT have historically paid dividends. This was because they had long relied on landline networks that experienced more gradual technological changes. Since that reduced the need for capital expenditures, telcos could derive revenue from the same network for decades, leaving plenty of cash for dividends.
Source Fool.com
Verizon Communications Inc. Stock
The stock is one of the favorites of our community with 23 Buy predictions and 1 Sell predictions.
With a target price of 41 € there is a slightly positive potential of 12.1% for Verizon Communications Inc. compared to the current price of 36.58 €.
