Verizon Communications(NYSE: VZ) is understood for a lot of issues. Excessive-speed web. An intensive community. Dependable protection. However for those who’re an investor, most likely the primary factor you consider when Verizon is talked about is the corporate’s dividend.
Due to its ultra-high dividend yield, Verizon is common with earnings buyers. You is likely to be stunned how a lot earnings a not-too-huge stake on this telecommunications inventory can generate. Here is what number of shares of Verizon Communications you need to personal to obtain $5,000 in annual dividend earnings.
Picture supply: Verizon Communications.
Verizon at the moment pays a quarterly dividend of $0.6775 per excellent share. That interprets to $2.71 in annual dividend funds for every Verizon share you personal.
Now, let’s decide what number of shares you’d must personal to obtain $5,000 in yearly dividend earnings. The mathematics is easy. All we have to do is divide $5,000 by $2.71 per share. This provides us a results of 1,845.018 shares.
If we spherical this quantity down and you purchased 1,845 shares of Verizon, your annual earnings can be a nickel wanting the goal $5,000. Should you spherical up and purchase 1,846 shares, your annual earnings can be $5,002.66. If you wish to make precisely $5,000, you’d want to make use of fractional shares (though I doubt many buyers care about being that exact).
Whatever the actual variety of shares you buy, you may want a major upfront funding. To make within the ballpark of $5,000 in annual dividend earnings, you would need to purchase round $81,000 of the inventory.
Nonetheless, it is essential to notice that the variety of Verizon shares it is advisable to personal to obtain $5,000 in annual dividend earnings may very well be a shifting goal. The first variable is the quantity of Verizon’s quarterly dividend cost.
Verizon has elevated its dividend for 18 consecutive years. The telecommunications big introduced its most up-to-date dividend hike in September 2024. If it raises the dividend payout once more later this 12 months, you will not should personal as many shares to make $5,000 in annual earnings.
How seemingly is it that Verizon will preserve its streak of dividend will increase going? I believe the possibilities are excellent. Verizon’s dividend payout ratio is at the moment 64.23%. This stage provides the corporate ample flexibility to spice up its dividend in a couple of months if the board of administrators chooses to take action.
Verizon’s free money circulate additionally signifies a robust place for growing the dividend. The corporate generated free money circulate of $3.6 billion within the first quarter of 2025, a giant soar from $2.7 billion within the prior-year interval. It expects to ship free money circulate of between $17.5 billion and $18.5 billion for full-year 2025. To place that vary into perspective, Verizon paid $11.2 billion to fund its dividend program final 12 months.
CEO Hans Vestberg listed Verizon’s capital allocation priorities within the firm’s first-quarter earnings convention name in April 2025. First on the checklist was to proceed investing within the enterprise. What was second? Vestberg stated Verizon plans to “assist and develop our dividends.”
The dividend is not the one factor that makes Verizon engaging to buyers, although. The inventory has been a strong winner this 12 months, rising near 10% whereas the foremost market indexes have declined.
One plus for Verizon is that its enterprise ought to maintain up comparatively properly underneath the Trump administration’s excessive tariffs. Vestberg famous within the Q1 name “a really small portion” of the corporate’s projected capital expenditures are uncovered to tariffs. He added: “We’re a U.S.-based firm, investing in [the] U.S. Fiber is U.S.-centric. Every thing we do with labor, product is fiber-based.”
Vestberg acknowledged that tariffs might trigger handset costs to extend. Nonetheless, he stated that Verizon is not planning to soak up the upper prices.
In the meantime, Verizon’s enterprise is booming. It generated industry-leading whole wi-fi service income in Q1. The corporate expanded its broadband market share. Verizon’s progress might speed up within the not-too-distant future with the pending acquisition of Frontier Communications.
Shopping for 1,845 or 1,846 shares of Verizon ought to make you roughly $5,000 over the following 12 months. Nonetheless, you possibly can make much more cash if the inventory’s worth will increase — which I believe is probably going.
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Keith Speights has positions in Verizon Communications. The Motley Idiot recommends Verizon Communications. The Motley Idiot has a disclosure coverage.
