Verizon Communications has quietly been rebuilding its funding case. New CEO Dan Schulman took the reins in October 2025 and wasted no time making large strikes.
He slashed$9 billion in mixed working and capital bills, closed the $20 billion acquisition of Frontier Communications, and approved a $25 billion share buyback program.
That is a variety of change in a short while. However for dividend traders, the Dow 30 inventory nonetheless provides a compelling yield in 2026.
A dividend inventory constructed on 20 years of hikes
Verizon (VZ) raised its dividend for the twentieth straight 12 months in January 2026. That form of consistency is uncommon.
Schulman referred to as the corporate’s dedication to annual dividend will increase “ironclad” throughout a Morgan Stanley investor convention in March.
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Schulman defined:
“We raised our dividend again for the 20th straight year, and I don’t want to be the CEO that doesn’t do that every single year going forward. That is an ironclad commitment for us.”
Chief Monetary Officer Tony Skiadas echoed that sentiment at a Deutsche Financial institution convention, telling traders the corporate’s objective is to “put the Board in a position to continue to raise the dividend per share in the future.”
Key dividend metrics for VZ inventory:
- Dividend yield: ~5.6%
- Annualized dividend per share: $2.83
- Estimated dividend per share (2027): $2.87
- Consecutive years of dividend progress: 20
- Dividend payout frequency: Quarterly
- 5-year dividend CAGR (2025–2030 estimate): ~1.9%
- Free money circulation (2025 precise): $20.13 billion
- Free money circulation steering (2026): No less than $21.5 billion
- Free money circulation CAGR (2025–2030 estimate): ~5.4%
The annual dividend expense for Verizon inventory is round $12 billion. Given its 2026 FCF estimates of $21.5 billion, the telecom large has sufficient room to reinvest in progress initiatives, acquisitions, and decrease debt ranges.
The yield alone places Verizon in uncommon firm. At roughly 5.5%, it is nicely above the S&P 500 common. And in contrast to many high-yielders, this one is backed by critical money technology.
The money circulation story is the true edge
Dividend shares stay or die by the power of the enterprise behind the payout. That is the place Verizon outperforms most friends.
Verizon CEO is specializing in price cuts
Udo Salters/ Getty Pictures
The corporate guided to at the least $21.5 billion in free money circulation for 2026. That is a 7%-plus improve from the $20.13 billion generated in 2025.
It is also greater than sufficient to cowl each the dividend and the brand new buyback program.
How is Verizon getting there?
- The $5 billion in working price cuts is a giant piece of it.
- The corporate trimmedroughly 13,000 jobs, lowered its contract workforce, and is decommissioning legacy copper networks.
- It additionally trimmed capital spending by about $4 billion by focusing solely on its wi-fi and fiber broadband buildout.
Skiadas defined the logic on the Barclays Communications Symposium in February. The corporate minimize spending in areas “not aligned to growth”: issues like enterprise wireline, wholesale, and initiatives with “too long of a payback.”
The outcome? Adjusted EBITDA of $50 billion in 2025, with analysts forecasting it climbing to $53 billion in 2026 and $58 billion in 2030.
Progress levers that help the dividend
A terrific dividend inventory wants greater than a great yield in the present day. It wants a enterprise that may maintain and develop that payout over time.
Verizon’s two greatest progress drivers proper now are wi-fi subscriber progress and broadband growth.
On the wi-fi aspect, the corporate is concentrating on750,000 to 1 million postpaid web additions in 2026.
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That is two to a few occasions what it added in 2025. The principle lever is not aggressive promotions however churn discount.
Schulman stated decreasing churn by simply 5 foundation factors will get Verizon greater than midway to its web add goal. A stickier buyer base means extra predictable income.
On broadband, the Frontier acquisition gave Verizon over 30 million fiber-passed properties in a single day.
Skiadas famous that converged prospects — those that bundle wi-fi and fiber collectively — see 30% decrease churn than standalone wi-fi prospects.
Over time, that convergence technique ought to help each income progress and margin growth.
Analysts estimate normalized EPS will develop from $4.71 in 2025 to $6.64 by 2030, a 7.1% compound annual progress charge. That offers Verizon the monetary headroom to maintain elevating the dividend 12 months after 12 months.
Buybacks add a second layer of return
Along with the dividend, the board approved as much as $25 billion in share repurchases over three years, with at the least $3 billion focused for 2026 alone.
Fewer shares excellent means every remaining share represents a bigger slice of future earnings and money circulation. It is a compounding impact that makes the dividend extra sustainable over time.
Whilst Verizon raises the greenback quantity of its dividend yearly, the whole money spent on dividends will really peak quickly after which decline as a result of buybacks are shrinking the share rely. That dynamic strengthens the steadiness sheet and rewards shareholders.
For traders looking for a high-yield dividend inventory with real endurance, Verizon’s mixture of 5.6% yield, 20 years of consecutive will increase, and bettering free money circulation trajectory deserves critical consideration.
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