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3 Reasons Investors Should Expect More From Verizon's 4% Yield

Published Thu, 15 Nov 2018 14:44:18 -0500 on Seeking Alpha

Verizon (NYSE: VZ) has been a well-known dividend play for many years. Though the last few dividend increases haven't exactly been anything to write home about, there are multiple trends that suggest the future will look different. Verizon looks to be gaining ground in its core business, it's following its plan to save money, and shareholders looking for more income should be happy with the result.
$8.7 billion reasons to believe Less than a year ago, Verizon announced it would undertake a plan to save $10 billion in cash over the next four years. As of last quarter, the company said it has achieved about $500 million of these savings. With the current quarter report, Verizon said this savings plan "has yielded approximately $1.3 billion of cumulative cash savings on a year-to-date basis." There are a few things investors can take from this update.
Last quarter, the company had an average of $678 million in estimated quarterly savings over the 14 remaining quarters under this plan. In theory, Verizon has about $8.7 billion in savings remaining. If the company can achieve its goal, this would suggest the company can save about $669 million per quarter over the next 3+ years.
There are essentially three different ways Verizon can put these savings to use. In the short term, it seems Verizon is intent on putting these funds toward debt retirement. If we look at the company's long-term debt net of cash, this measure has declined by over $4 billion... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
AT&T 32.27   12.0 2.68 2.04 6.32