Verizon: Blue Chip Stock For Reliable Dividends

Many investors seeking stable and reliable income from their investments turn to companies with established track records of dividend growth. To raise dividends consistently year after year, a company must have competitive advantages and recession-resistant business models. Quality dividend stocks have long histories of operating in a variety of environments, and in many cases, have paid dividends through those tough environments. We call these blue-chip stocks, borrowing a term from the world of poker where the blue chips carry the highest value. Blue-chip stocks are a great place to start for someone looking to generate passive and reliable income over the long-term. Verizon Communications (VZ) is a blue-chip dividend stock with a 4.5% yield, a reliable dividend, and over a decade of annual dividend increases. Verizon stock offers strong return potential with a high level of reliable income.

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Verizon: Blue Chip Stock for Reliable Dividends

Verizon Business Overview

Verizon is a communications giant, offering a full suite of communication, information, and entertainment products and services to consumers, businesses, and governments worldwide, although its business is concentrated mostly in the US. The company operates in three segments: Verizon Consumer Group (69% of revenue), Verizon Business Group (24% of revenue), and Verizon Media Group (7% of revenue).

Verizon’s products include postpaid and prepaid wireless service, internet access, wireless equipment, such as smartphones and tablets, as well as voice services. Verizon’s business is mostly concentrated on wireless service, where it is a leader in that space. Indeed, the company has nearly 100 million wireless retail connections, and boasts 6 million broadband connections, as well as 4 million Fios video connections, and 25 million fixed-line connection mostly in the northeast. Wireless contributes three-quarters of all revenues, and broadband and cable services account for about a quarter of sales. The company’s network covers ~300 million people and 98% of the U.S. 

Verizon was founded in 1983 and was formerly known as Bell Atlantic before changing its name to Verizon in 2000 when Bell Atlantic and GTE merged. Verizon acquired Alltel in 2009, AOL in 2015, and Yahoo in 2017 and a host of smaller companies. Verizon bought out its joint venture partner, Vodaphone, in 2014. Today, it trades with a ~$228 billion market capitalization and enjoys $128.3 billion in annual revenue in 2020.

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