Communications Sector

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>>> Verizon (VZ)



https://www.thestreet.com/story/13646215/2/10-best-dividend-stocks-to-own-now-for-a-safe-retirement.html



Verizon is a holding in our Top 20 Dividend Stocks portfolio. When it comes to wireless commutations, Verizon is at the top. Since the 1980's when it was spun off in the breakup of the original AT&T, Verizon has pursued wireless to perfection. These days it represents 93% of operating income on 70% of revenues.

The remaining business comes from the wireline telephone activity that was once the core of AT&T. Within these two broad confines reside a variety of products and services like voice and data, corporate networking, broadband and security solutions. Hundreds of millions of people in the U.S. and around the world are touched everyday by Verizon's highly diversified business.

The wireless business requires considerable capital to establish and to maintain the latest in technology. However, once in place, a digital network generates enormous cash flow. Since there is a limited amount of radio spectrum allocated to mobile wireless, meaningful new entrants for all practical purposes are non-existent.

Verizon has been paying quarterly dividends continuously since the 1984 breakup of AT&T. Increases have been made each year since 2006, qualifying the company as a Dividend Achiever.

Over the past ten years, dividend growth has averaged 3.8% with a 2.6% rate in the past five. The latest quarterly dividend of $0.565 per share was declared on July 6. An increase to $0.575 in the third quarter would be consistent with patterns of previous increases.

Verizon pays out a conservative 50% of earnings while retaining ample reserves for capital expenditures and acquisitions. In the last 12 months, Verizon's operating cash flow amounted to a solid $36 billion thus insuring both the safety of the current dividend and the ability to increase future payouts.

Shares of Verizon currently offer investors a high yield of 4.1%.

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