Verizon Communications recently declared a quarterly dividend of $0.69, amounting to an annual payout of $2.76 per share. To generate $1,000 in yearly dividends from this stock, an investor would need to acquire roughly 362 shares, which, at the current price of $40.66, would require an investment of approximately $14,732. This makes Verizon an attractive option for investors seeking passive income, especially given its current dividend yield of over 6%.
As the leading U.S. wireless carrier with 146.1 million retail connections as of the third quarter of 2025, Verizon remains a highly profitable entity, reporting a net income of $20 billion. However, despite the robust dividend payout, Verizon has significantly lagged behind the overall stock market over the past five years, with its stock price declining by 30%, compared to an 82% rise in the S&P 500 during the same period. Even when accounting for dividends, investing in Verizon five years ago would have resulted in a net loss.
Looking ahead, Verizon’s ongoing investments in upgrading its 5G network may bolster its stock performance in the future. However, it is essential for potential investors to align their investment strategies with their goals, especially since Verizon may not convert into a high-growth stock. While it may be suitable for income-focused investors, those younger and seeking growth opportunities might be inclined to explore alternative options.
Additionally, analysts at The Motley Fool have identified ten stocks that they believe present better investment opportunities than Verizon right now, emphasizing the potential for substantial returns in the years ahead. Historical examples from their recommendations underline the benefits of investing in high-potential stocks, with early investors in companies like Netflix and Nvidia reaping extraordinary gains.
For those prioritizing stable income and gradual dividends, Verizon may still be a solid choice. However, it remains prudent for investors to consider their financial strategies carefully before making a decision.