Traders on the lookout for source of revenue from their portfolio can at all times respect a competent dividend-paying industry. Verizon Communications (VZ +1.55%) is a kind of corporations. And extra just lately, it is been no longer best rewarding shareholders with a top dividend yield but in addition with a surging inventory value. The inventory is up greater than 15% yr so far, and the corporate’s newest quarterly effects bolstered the bull case as new CEO Dan Schulman helps the corporate reaccelerate its industry and praise shareholders with much more capital as Verizon began executing on an competitive proportion repurchase program.
This is why Verizon’s first-quarter effects best make the bull case for this dividend inventory — and its 6.1% dividend yield — even more potent.
Symbol supply: Getty Photographs.
Profits enlargement speeds up
To start with look, Verizon’s effects might glance unimpressive. Income grew simply 2.9% yr over yr to $34.4 billion.
However what is spectacular is that the corporate is demonstrating running leverage. Verizon’s internet source of revenue rose at a quicker charge than income, expanding 3.3% yr over yr. And its adjusted revenue earlier than passion, taxes, depreciation, and amortization (EBITDA) higher 6.7% yr over yr to $13.4 billion.
Verizon delivered $1.28 in non-GAAP (adjusted) revenue in keeping with proportion. This beat analysts’ estimates and marked the most powerful adjusted earnings-per-share enlargement charge the corporate has posted in years. And using house how the corporate is making growth on profitability, Verizon’s adjusted revenue in keeping with proportion rose 7.6% yr over yr, marking the corporate’s highest quarterly year-over-year enlargement charge since 2021.
“Our first quarter monetary effects display our disciplined execution is immediately translating into running leverage,” defined Verizon leader monetary officer Tony Skiadas all over the corporate’s first-quarter revenue name. “We’re using monetary enlargement and robust unfastened money drift at the same time as we go through a transitional yr for income.
This revenue momentum got here with a very powerful buyer milestone. Verizon reported 55,000 overall postpaid telephone internet additions within the first quarter of 2026 — its first certain first-quarter consequence in this metric since 2013. That may be a sharp reversal from the year-ago duration, when postpaid telephone internet losses totaled 289,000, and suggests the corporate’s efforts to cut back churn and reinforce buyer economics is also operating.
Spectacular steering
Control’s full-year outlook added to the case that Verizon’s turnaround has some traction. Verizon raised its 2026 adjusted earnings-per-share steering to $4.95 to $4.99, representing year-over-year enlargement of five% to six%. It is a great uptick from control’s earlier steering for 4% to five% enlargement.
And transferring right down to the money drift that helps the corporate’s dividend, Verizon maintained its outlook totally free money drift of a minimum of $21.5 billion — an enormous determine for an organization with a marketplace capitalization of $197 billion.
A mouth-watering capital go back program
And talking of the corporate’s dividend, Schulman famous that Verizon has an “ironclad dedication,” so buyers must be capable to rely on it.
Additional, this dividend is rising. The corporate’s newest build up was once a 2.5% spice up, marking Verizon’s twentieth consecutive yr of dividend will increase.
Much more, the corporate’s dividend is not Verizon’s best shareholder-return lever anymore. Verizon finished $2.5 billion in proportion repurchases within the first quarter and stays heading in the right direction to repurchase a minimum of $3 billion for the overall yr. The buyback displays control’s “conviction within the worth of the inventory at present ranges,” mentioned Skiadas all over the corporate’s revenue name.
These days’s Trade
(1.55%) $0.72
Present Value
$47.10
Key Information Issues
Marketplace Cap
$196B
Day’s Vary
$46.74 – $48.65
52wk Vary
$38.39 – $51.68
Quantity
38M
Avg Vol
31M
Gross Margin
45.79%
Dividend Yield
5.96%
An inexpensive valuation
Best possible of all, the inventory is reasonable.
Stocks these days industry at simply 10 occasions the midpoint of control’s 2026 adjusted earnings-per-share steering.
There are dangers, in fact. Verizon’s debt load remains to be really extensive, and the Frontier acquisition driven internet unsecured debt upper within the quarter. Additional, pageant from AT&T and T-Cell stays intense.
However Verizon’s profitable dividend is helping offset those dangers, as buyers are compensated to carry stocks whilst the corporate dukes it out within the intensely aggressive wi-fi service marketplace. As well as, the corporate’s sturdy quarterly effects arguably bolster the bull case.
