Verizon remains a top dividend stock for passive income

Verizon Communications has softly been rebuilding its concern case. New CEO Dan Schulman took the reins successful October 2025 and wasted nary clip making large moves.

He slashed$9 cardinal successful combined operating and superior expenses, closed the $20 cardinal acquisition of Frontier Communications, and authorized a $25 cardinal stock buyback program.

That's a batch of alteration successful a abbreviated time. But for dividend investors, the Dow 30 banal inactive offers a compelling output successful 2026.

Verizon (VZ) raised its dividend for the 20th consecutive twelvemonth successful January 2026. That benignant of consistency is rare.

Schulman called the company's commitment to yearly dividend increases "ironclad" during a Morgan Stanley capitalist league successful March.

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Chief Financial Officer Tony Skiadas echoed that sentiment astatine a Deutsche Bank conference, telling investors the company's extremity is to "put the Board successful a presumption to proceed to rise the dividend per stock successful the future."

• Dividend yield: ~5.6%

• Annualized dividend per share: $2.83

• Estimated dividend per stock (2027): $2.87

• Consecutive years of dividend growth: 20

• Dividend payout frequency: Quarterly

• 5-year dividend CAGR (2025–2030 estimate): ~1.9%

• Free currency travel (2025 actual): $20.13 billion

• Free currency travel guidance (2026): At slightest $21.5 billion

• Free currency travel CAGR (2025–2030 estimate): ~5.4%

The yearly dividend expense for Verizon banal is around $12 billion. Given its 2026 FCF estimates of $21.5 billion, the telecom elephantine has capable country to reinvest successful maturation projects, acquisitions, and little indebtedness levels.

The output unsocial puts Verizon successful uncommon company. At astir 5.5%, it's good supra the S&P 500 average. And dissimilar galore high-yielders, this 1 is backed by superior currency generation.

Dividend stocks unrecorded oregon dice by the spot of the concern down the payout. That's wherever Verizon outperforms astir peers.

The institution guided to astatine slightest $21.5 cardinal successful escaped currency travel for 2026. That's a 7%-plus summation from the $20.13 cardinal generated successful 2025.

It's besides much than capable to screen some the dividend and the caller buyback program.

How is Verizon getting there?

• The $5 cardinal successful operating outgo cuts is simply a large portion of it.

• The institution trimmedroughly 13,000 jobs, reduced its declaration workforce, and is decommissioning bequest copper networks.

• It besides trimmed superior spending by about $4 billion by focusing lone connected its wireless and fibre broadband buildout.

Skiadas explained the logic astatine the Barclays Communications Symposium successful February. The institution chopped spending successful areas "not aligned to growth": things similar concern wireline, wholesale, and projects with "too agelong of a payback."

The result? Adjusted EBITDA of $50 cardinal successful 2025, with analysts forecasting it climbing to $53 cardinal successful 2026 and $58 cardinal successful 2030.

A large dividend banal needs much than a bully output today. It needs a concern that tin prolong and turn that payout implicit time.

Verizon's 2 biggest maturation drivers close present are wireless subscriber maturation and broadband expansion.

On the wireless side, the institution is targeting750,000 to 1 cardinal postpaid nett additions successful 2026.

Related: Verizon's $20 cardinal acquisition resets dividend outlook

That's 2 to 3 times what it added successful 2025. The main lever isn't assertive promotions but churn reduction.

Schulman said reducing churn by conscionable five ground points gets Verizon much than halfway to its nett adhd target. A stickier lawsuit basal means much predictable revenue.

On broadband, the Frontier acquisition gave Verizon implicit 30 cardinal fiber-passed homes overnight.

Skiadas noted that converged customers — those who bundle wireless and fibre unneurotic — spot 30% little churn than standalone wireless customers.

Over time, that convergence strategy should enactment some gross maturation and borderline expansion.

Analysts estimation normalized EPS volition turn from $4.71 successful 2025 to $6.64 by 2030, a 7.1% compound yearly maturation rate. That gives Verizon the fiscal headroom to support raising the dividend twelvemonth aft year.

In summation to the dividend, the committee authorized up to $25 cardinal successful stock repurchases implicit 3 years, with astatine slightest $3 cardinal targeted for 2026 alone.

Fewer shares outstanding means each remaining stock represents a larger portion of aboriginal net and currency flow. It's a compounding effect that makes the dividend much sustainable implicit time.

Even arsenic Verizon raises the dollar magnitude of its dividend annually, the full currency spent connected dividends volition really highest soon and past diminution due to the fact that buybacks are shrinking the stock count. That dynamic strengthens the equilibrium expanse and rewards shareholders.

For investors hunting for a high-yield dividend banal with genuine staying power, Verizon's combination of 5.6% yield, 20 years of consecutive increases, and improving escaped currency travel trajectory deserves superior attention.

Related: Verizon adds caller rules, making leaving harder for customers

This communicative was primitively published by TheStreet connected Mar 30, 2026, wherever it archetypal appeared successful the Investing section. Add TheStreet arsenic a Preferred Source by clicking here.