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Buy Verizon While Dividend Yield Is Still Over 4%

Published Thu, 08 Nov 2018 13:08:06 -0500 on Seeking Alpha

The Breakout Is Here The reception to Verizon Communications, Inc. (VZ) Q3 earnings was strong with shares jumping 4.1% on the report, the second biggest daily gain for the stock in 10 years. VZ is trading with positive momentum, now at the highest level since the year 2000.

Verizon Monthly Stock Chart. Source: finviz.com
In Q3, Verizon beat top line and EPS market expectations but more importantly, reported strong wireless operating figures with 515k net postpaid subscribers, likely the most closely watched metric. The company was able to grow its customer base while keeping costs down. Wireless EBITDA has climbed steadily over the past three years reaching a year to date level of 47.8%, the highest ever.

Time For Verizon Dividend Yield To Move Under 4% The stock is currently trading at $57.64 per share and yields 4.12% for the trailing twelve months. Notably, for the first time since July 2016, Verizon is approaching the 'mythical' 4% yield level. Numerous times over the past decade, the 4% yield level has acted as a sort of technical resistance on the stock from further appreciation. The stock hasn't traded consistently under the 4% yield level since 2002, each time selling off taking the yield higher.
Some investors may view this peculiarity as evidence the stock is currently expensive or a sell signal, but I disagree. In my opinion, the company has evolved and this time is different. The stock can move higher pushing the dividend yield... Read more