May 01, 2025 a 11:31 am
📊 VZ: Dividend Analysis - Verizon Communications Inc.
Verizon Communications Inc. is a prominent player in the telecommunications sector, known for its stable dividend history and consistent payout. With a dividend yield of 6.28% and a history stretching over 42 years, it stands as a robust investment for income-seeking investors. However, modest dividend growth and a relatively high payout ratio warrant careful monitoring.
Overview 🗣️
Verizon, being a major telecom entity, shows strong dividends appealing to yield-focused investors. The consistent dividend history indicates reliability, while the absence of cuts solidifies investor trust.
| Metric | Details |
|---|---|
| Sector | Telecommunications |
| Dividend Yield | 6.28% |
| Current Dividend per Share | 2.67 USD |
| Dividend History | 42 years |
| Last Cut or Suspension | None |
Dividend History 🕰️
Verizon's uninterrupted dividend history over 42 years is a testament to its stability and commitment to shareholders. This consistency is crucial for investors seeking reliable income streams.
| Year | Dividend per Share (USD) |
|---|---|
| 2025 | 1.3550 |
| 2024 | 2.6725 |
| 2023 | 2.6225 |
| 2022 | 2.5725 |
| 2021 | 2.5225 |
Dividend Growth 📈
Dividend growth is a vital indicator of a company's ability to enhance shareholder returns. Verizon's growth appears modest, reflecting operational stability.
| Time | Growth |
|---|---|
| 3 years | 0.02% |
| 5 years | 0.02% |
The average dividend growth is 0.02% over 5 years. This shows moderate but steady dividend growth.
Payout Ratio ⚖️
The payout ratio is a critical metric for assessing dividend sustainability. Verizon's payout indicates a balanced return approach, but a close eye must be maintained on this dynamic.
| Key figure | Ratio |
|---|---|
| EPS-based | 63.32% |
| Free cash flow-based | 55.39% |
The payout ratios reveal that Verizon maintains a responsible dividend policy. The current EPS payout of 63.32% is sustainable, while an FCF payout of 55.39% reassures cash flow adequacy for dividends.
Cashflow & Capital Efficiency 💸
Verizon's cash flow metrics, including free cash flow yield and CAPEX ratios, indicate robust capital efficiency, situating them well for dividend payments.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Free Cash Flow Yield | 11.22% | 11.78% | 6.28% |
| Earnings Yield | 10.38% | 7.32% | 12.84% |
| CAPEX to Operating Cash Flow | 48.74% | 50.08% | 71.99% |
| Stock-based Compensation to Revenue | 0% | 0% | 0.45% |
| Free Cash Flow / Operating Cash Flow Ratio | 51.26% | 49.92% | 28.00% |
Verizon's free cash flow and earnings yields confirm strong cash generation ability, pivotal for maintaining dividend payments. The CAPEX to Operating Cash Flow metric reveals operational efficiency and prudent capital utilization.
Balance Sheet & Leverage Analysis 📉
The leverage analysis focuses on Verizon's ability to manage debt and its overall financial stability, which are crucial for long-term dividend sustainability.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Debt-to-Equity | 1.70 | 1.89 | 1.93 |
| Debt-to-Assets | 43.76% | 46.01% | 46.44% |
| Debt-to-Capital | 62.92% | 65.43% | 65.92% |
| Net Debt to EBITDA | 3.45 | 4.31 | 3.57 |
| Current Ratio | 0.61 | 0.69 | 0.75 |
| Quick Ratio | 0.59 | 0.65 | 0.71 |
| Financial Leverage | 3.88 | 4.11 | 4.17 |
Verizon’s high financial leverage and debt metrics suggest vigilance in future economic climates, though current leverage management enables competitive positioning.
Fundamental Strength & Profitability ✅
Evaluating Verizon’s fundamental metrics, such as return on equity and asset profitability, is paramount for understanding valuation and operational effectiveness.
| Metric | 2024 | 2023 | 2022 |
|---|---|---|---|
| Return on Equity | 17.64% | 12.57% | 23.32% |
| Return on Assets | 4.55% | 3.05% | 5.60% |
| Net Profit Margin | 12.99% | 8.67% | 15.53% |
| EBIT Margin | 21.98% | 16.80% | 23.30% |
| EBITDA Margin | 35.26% | 29.96% | 35.52% |
| Gross Margin | 59.87% | 59.03% | 56.78% |
| Research & Development to Revenue | 0% | 0% | 0% |
Profitability metrics, particularly ROE and margin stability, indicate consistent operational performance, adding to Verizon's long-term investment appeal.
Price Development 💹
Dividend Scoring System 🎯
| Criterion | Score | Score Bar |
|---|---|---|
| Dividend Yield | 5 | |
| Dividend Stability | 4 | |
| Dividend Growth | 2 | |
| Payout Ratio | 4 | |
| Financial Stability | 3 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 3 |
Total Score: 30/40
Rating 🏆
Verizon Communications Inc. presents itself as a compelling choice for income-focused investors, given its extensive dividend history and robust yield. While growth remains moderate and leverage is higher, the stable cash flow and operational efficiency should continue to support its dividend payments. Investors are advised to consider Verizon as a steady income option, while keeping leverage in check.