Verizon is a premier powerhouse delivering resilient recurring profits from mission-critical telecommunications infrastructure. With its core network infrastructure investments moderating following heavy peak 5G deployment, it’s poised for higher future profitability.
Furthermore, the company provides exceptional total return stability via its shareholder distribution program. The current dividend is covered by a low cash flow payout ratio. This leaves sufficient balance-sheet room for multi-billion-dollar share repurchases and long-term debt retirements without impairing network quality.
The stock trades at just 8.2 times the company’s forward earnings forecast. That’s a notable discount and reflects overly conservative sentiment regarding debt exposure while overlooking steady broadband market-share gains and lucrative AI fibre contracts.
VERIZON COMMUNICATIONS INC. (New York symbol VZ) is the second-largest wireless carrier in the U.S., after AT&T. It also sells traditional telephone lines, high-speed Internet and TV services.
Verizon has now agreed to merge its business communication operations outside of the U.S. with U.K.-based BT Group plc.
Each firm will own 50% of this joint venture, which will have more that 3,000 customers in over 180 countries. The combined operation will generate annual revenue of $4 billion.
As part of the deal, Verizon will also pay $625 million to BT. The partners aim to complete the transaction in 2027.
The plan will let Verizon increase its focus on its main U.S. wireless and Internet operations, which face strong competition from rival carriers.
Meanwhile, Verizon continues to expand its high-speed data networks. It has now teamed up with fibre-optic cable maker Corning Inc. (New York symbol GLW) to add over 80 million miles (about 129 million kilometres) to its network between 2027 and 2032.
As a result, Verizon’s fibre-network will reach between 40 million and 50 million household and business locations, up from the current 30 million.
The bigger network will also enhance the company’s ability to serve providers of new artificial intelligence software services, which require high-capacity data connections with near-zero latency.
Verizon has not yet said how much it plans to spend on this project. However, the plan should help it attract more customers and spur its long-term earnings. For 2027, earnings will probably rise to $5.30 a share and the stock trades at just 8.2 times that estimate.
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Verizon’s cost cutting efforts boost profits
In the quarter ended June 30, 2026, Verizon saw its total revenue decrease 0.7%, to $34.3 billion from $34.5 billion a year earlier. Revenue fell due to a nearly 20% decline in equipment revenue driven by significantly lower customer upgrade volumes and a strategic decision to reduce spending on device subsidies, which offset a sequential improvement in mobility and broadband service revenue.
Excluding one-time items, earnings were $5.42 billion, or $1.30 a share. That was up 5.1% from $5.15 billion, or $1.22 a share. Stronger growth in mobility and broadband service revenue and progress on the company’s operating cost efficiency initiatives boosted profits.
The company last raised your quarterly dividend by 2.5% with the May 2026 payment, to $0.7075 a share from $0.69. The new annual rate of $2.83 a share yields a high 6.5%. Verizon has raised your dividend by an average of 2.4% annually over the past 5 years and holds a Highest TSI Dividend Sustainability Rating.
Recommendation in Dividend Advisor: Verizon Communications Inc. is a buy.
