Verizon (VZ 2.03%) is a dividend stock with an ultra-high 5.5% yield. The dividend has been increased annually for decades. And the business generates reliable income from sticky telecommunications subscriptions. Before you buy the stock, however, you’ll want to know a few important facts.
Verizon operates in a competitive industry
Perhaps the most important thing to understand about Verizon’s business is that it faces material competition. Cell phone service and internet connections are largely commodities today. And despite its vast size, Verizon has to compete for its customers with other cellphone companies and cable companies. It has no choice but to offer high-quality services at attractive prices, or it will lose customers.
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In other words, pricing power is limited and capital spending needs are high. That’s not bad, per se, but neither is it good. And, notably, Verizon already carries a material amount of debt. To be fair, T-Mobile (TMUS 3.15%) is more leveraged, but AT&T (T 1.58%) is less. You’ll need to keep close tabs on Verizon’s balance sheet if you buy it.
Verizon is not a great dividend growth stock
While Verizon’s long record of annual dividend increases is nice, investors need to temper their enthusiasm. Over the past decade the dividend has increased at an annualized rate of just 2% or so. That’s below the historical inflation rate, which means the dividend’s buying power has been shrinking over time. That’s not good if you are trying to live off the income your portfolio generates.
Today’s Change
(-2.03%) $-1.02
Current Price
$49.49
Key Data Points
Market Cap
$213B
Day’s Range
$49.38 – $50.42
52wk Range
$38.39 – $51.66
Volume
994K
Avg Vol
31M
Gross Margin
45.79%
Dividend Yield
5.41%
That said, Verizon is trying to address its anemic growth. The big move was the board of directors bringing in a new CEO. However, that only occurred in late 2025, so there’s still no clear sign that Verizon’s growth will improve anytime soon. In fact, given the size of the business, materially improving the company’s growth profile could be a multi-year effort. If you buy the stock, you’ll also want to pay close attention to the new CEO’s growth plans as they unfold in 2026.
Verizon can provide you money now, but is it worth it?
Verizon will be of interest to investors who want to maximize the income their portfolios generate today. However, the low dividend growth rate should temper most dividend investors’ enthusiasm for the stock. Add in a new CEO, lots of leverage, and high capital spending needs in a competitive industry, and most investors will probably decide that Verizon isn’t as attractive a dividend stock as it may seem at first because of its lofty yield.
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