Want $500 In Annual Dividend Income? Here's How Much You'd Have To Invest In Verizon Stock
Verizon Communications (NYSE: VZ) has a large base of customers and a long record of paying dividends. It's got a streak of increasing the dividend each year for 17 consecutive years and that has raised investor interest, although shares trade well off all-time highs.
If you are looking for some annual income to help pay the bills, Verizon stock has the potential to help. Here's how many shares of Verizon stock you would have to buy to earn $500 per year in dividend income.
What is Verizon's dividend yield?
In 2023, Verizon increased the quarterly dividend by 2% to $0.665 per share, bringing the per-share distribution for the full year to $2.66. With the share price sitting at $40.71, the stock's dividend yield is currently 6.6%.
To generate $500 of passive income from the stock annually, an investor would have to buy 461 shares costing roughly $18,800.
What's great about Verizon as a dividend investment is the nature of its wireless service business, which is built around consistent monthly revenue from charging customers for their wireless service plans. The company had 94 million postpaid connections in 2023, which refers to the billed wireless plan that most people use. This monthly revenue lends itself to consistent financial results and quarterly dividend payments to shareholders.
Is the stock a buy?
The stock is trading about 37% off its highs. The lowered share price stems from concerns over increasing competition. However, Verizon reported improved churn rates with postpaid customers in the first quarter, potentially easing some of those concerns. The stock is up 8% year to date, slightly behind the Nasdaq Composite's return.
It's also encouraging that management expects free cash flow to improve throughout the year, which should lead to another dividend increase this year.
Should you invest $1,000 in Verizon Communications right now?
Before you buy stock in Verizon Communications, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Verizon Communications wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $671,728!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of May 28, 2024
John Ballard has no position in any of the stocks mentioned. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.
