Verizon’s dividend yield
Now let’s analyze Verizon’s (VZ) dividend yield compared to those of its peers such as AT&T (T). A dividend yield is the true cash inflow to the investor in return for every dollar invested in a company’s equity until the stock is sold.
Dividend yields provide a steady income for investors. Long-term investors tend to prefer stocks that have better dividend yields and dividend growth. Verizon’s dividend yield was ~4.6% on January 12, 2018, lower than the same metric for AT&T at ~5.4%.
In 3Q17, Verizon declared a quarterly dividend of $0.59 per share, up by ~2.2% year-over-year (or YoY). Verizon paid total dividends of $2.4 billion in 3Q17. In 2016, the telecommunications company paid total dividends of nearly $9.3 billion and utilized almost all of its adjusted free cash flow (or FCF) to pay these dividends.
On January 12, 2018, Verizon’s market cap was ~$211.6 billion, making it the second-largest US wireless service provider in terms of market cap. In comparison, Sprint (S) had a market cap of ~$22.8 billion, AT&T had a market cap of ~$226.5 billion, and T-Mobile (TMUS) had a market cap of ~$53.0 billion.