Thursday, September 07, 2017 3:36:21 PM
Sep 07, 2017 15:33:00 (ET)
By Amey Stone
Verizon Communications ( VZ) upped its dividend a small amount on Thursday, attracting little notice from investors.
The board increased the quarterly dividend to 59 cents a share from 57.7, a 2.2% increase that brings the dividend yield to 5.1%.
The new dividend is payable on November 1 to shareholders of record on October 10. It's the 11th year in a row that Verizon has increased the dividend.
Investors weren't encouraged to buy the stock, however. Shares drifted lower and were down 75 cents, or 1.6%, to $46.16 in late afternoon trading.
The decline may have been partly due to a Morgan Stanley report that suggested investors should stay in utilities rather than rotate into telecoms, like Verizon.
Analysts wrote:
Why we prefer utilities. We think they face limited downside risk from a sector de-rating, while telcos offer limited upside relative to utilities. Quantitative factor analysis confirms the diverging risk profiles of the sectors, as well as yield spreads vs. the 10-year treasury. We favor NextEra Energy (NEE) (rated Oveweight) over VZ (also Overweight) given a higher free cash flow (FCF) yield, clearer avenues for growth, and less fundamental business risk.
More at Barron's Income Investing blog, http://www.barrons.com/income-investing
(END) Dow Jones Newswires
September 07, 2017 15:33 ET (19:33 GMT)
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