Key Points

• Verizon and Realty Income may not offer much growth, but their ability to fund growing dividend payments is rock-solid.

• Pfizer struggled following the wind-down of the coronavirus pandemic, with nothing offsetting declining sales of Paxlovid. That's changing.

• Exchange-traded funds are an easy diversification solution for at least a portion of your dividend portfolio.

• 10 stocks we like better than Pfizer ›

Does the prospect of economic uncertainty have you rethinking your portfolio? Perhaps you'd like to collect a little more cash while the economic headwinds are blowing? It's not an unreasonable concern. Plenty of other investors are already thinking more defensively than they've felt they needed to in a while.

To this end, here's a closer look at five high-yielding dividend stocks to consider adding to your portfolio sooner rather than later, until it's clear the worst is behind us.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

1. Verizon Communications

Dividend yield: 6.2%

Verizon Communications (NYSE: VZ) is, of course, one of the country's biggest wireless service providers, boasting well over 100 million paying customers who collectively handed over nearly $135 billion worth of revenue last year alone. Of that, $18 billion was turned into net income, $11.25 billion of which was dished out to shareholders in the form of dividends. That's in line with the company's long-term norms.

There is an arguable downside here. That's growth ... or lack thereof. The well-saturated U.S. wireless market doesn't offer much in the way of upside potential above and beyond simple population growth. Verizon is finding some inroads within the institutional/private 5G communications space, but that's a highly competitive market. There's just not a ton of expansion to be added here either.

What Verizon may lack in growth potential, however, it more than makes up for in consistency and sheer payout. Nobody's interested in giving up their mobile phones, which supports a sizable forward-looking yield of 6.2% that's based on a dividend that has now been raised for 18 consecutive years. Not bad.

2. Realty Income

Dividend yield: 5.6%

Realty Income (NYSE: O) isn't a stock in the traditional sense. Rather, it's a real estate investment trust, or REIT. That just means it owns a portfolio of rent-bearing real estate.

REITs trade just like ordinary stocks do, and pay dividends the same way that dividend stocks do, too. And Realty Income brings something else to the table that's pretty unique in addition to its sizable forward-looking yield of 5.6%. That's a monthly dividend payment, as opposed to the quarterly cadence you'll get with most other dividend stocks.

Realty Income's specialty is retailing real estate. In light of the so-called "retail apocalypse" that seems to never end, this focus seems like a liability. Just take a step back and look at the bigger picture. While numbers from Coresight Research point out that 7,325 U.S. stores were shuttered last year, 5,970 new stores were opened (or reopened). Realty Income further narrows this gap by serving the strongest survivors in the business. Its top tenants include 7-Eleven, Dollar General, Dollar Tree, and FedEx, just to name a few. Underscoring the quality caliber of its renters is the fact that its occupancy rate currently stands at an industry-beating 98.5%, and only fell to 97.9% in COVID-crimped 2020.

This resilience is one of the reasons the REIT has been able to raise its payout annually for the past 30 consecutive years.

3. SPDR Portfolio S&P 500 High Dividend ETF

Dividend yield: 4.6%

Speaking of dividend stocks that aren't actually stocks, add the SPDR Portfolio S&P 500 High Dividend ETF (NYSEMKT: SPYD) to your watch list, if not to your portfolio.

An ETF (or exchange-traded fund) is a basket of stocks with a common characteristic. In this instance, these tickers are all part of the S&P 500 High Dividend Index, which tracks the 80 highest-yielding names within the S&P 500.

These include Philip Morris, toymaker Hasbro, AT&T, and Ford Motor Company, for reference. None of these names has a great deal of growth firepower. All of them, however, are healthy dividend payers. Most of them also have a solid track record of dividend growth, even if it's not required for inclusion in the underlying index.

Sure, you can probably find higher dividend yields than the one SPYD offers. The aforementioned Realty Income and Verizon both boast bigger ones, for instance. The SPDR Portfolio S&P 500 High Dividend ETF is still an incredibly simple way of achieving a well-diversified mix of dividend stocks though, with a little more potential for capital appreciation than Verizon or Realty Income offer.

4. Pfizer

Dividend yield: 6.9%

It's no secret that drugmaker Pfizer (NYSE: PFE) has underperformed since the wind-down of COVID-19, which upended sales of its Paxlovid approved to treat the disease. The company's top line has slipped from 2022's $100 billion to only $64 billion last year, for perspective, and analysts aren't looking for any sales growth this year or next either. That's the chief reason Pfizer shares continue to flounder.

If you can look just a little further down the road though, some new blockbuster drugs are in the works -- drugs like vepdegestrant, for the treatment of ER+/HER2- metastatic breast cancer. While it will be competing with plenty of other therapies in this same space, it's noteworthy that the FDA fast-tracked this drug, which is being co-developed with Arvinas.

And that's just one. Pfizer got a total of four promising oncology drugs with its 2023 acquisition of Seagen, and now has over 100 clinical trials underway, 30 of which are in phase 3 (late-stage) testing. Indeed, the company believes it's got eight oncology candidates in its developmental pipeline that could become blockbusters by 2030. Little of this long-term upside is being reflected in the stock's present price, however, even though it arguably should be.

More to the point for interested income investors, this pharmaceutical stock's weakness has pushed its forward-looking dividend yield up to nearly 7% at a point where the pharma giant is on the verge of significant prolonged revenue and profit growth.

5. Global X Nasdaq 100 Covered Call ETF

Dividend yield: 14%

Finally, consider adding a stake in the Global X Nasdaq 100 Covered Call ETF (NASDAQ: QYLD) to your dividend portfolio.

It's not a stock. It's an exchange-traded fund. And an unusual one at that. While it holds the same tickers that make up the tech-heavy Nasdaq-100 index, serving as an index fund isn't its primary purpose.

Rather, this ETF's purpose is to generate reliable income that's regularly distributed to shareholders by selling covered calls against the ETF's stock holdings. It's an income-generating process called "buy-write," in fact -- you're buying a stock, and then "writing" (or selling) call options on those shares, essentially using them as collateral.

And the process works. Although the income generated by writing covered calls over and over again can be erratic (don't count on that trailing 14% yield going forward), the resulting reliable yields are typically big even if they're not precisely predictable.

There's also a big downside, though. That is, this fund is almost certainly guaranteed to underperform the Nasdaq-100 itself, even after factoring in all of its sizable dividend payments. That's just the nature of selling covered calls -- the strategy doesn't let you fully participate when the market's rallying the most. Writing options is just a means of monetizing stock holdings when they're mostly moving sideways, or losing ground.

Still, with a double-digit yield, even only capturing a portion of the Nasdaq-100's long-term upside isn't a bad bet. It's just arguably not the only dividend-paying investment you'd want to own at any given time, mostly due to its inconsistent payments.

Should you invest $1,000 in Pfizer right now?

Before you buy stock in Pfizer, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Pfizer wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $652,133!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,056,790!*

Now, it’s worth noting Stock Advisor’s total average return is 1,048% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of July 15, 2025

James Brumley has positions in AT&T. The Motley Fool has positions in and recommends FedEx, Pfizer, and Realty Income. The Motley Fool recommends Hasbro, Philip Morris International, and Verizon Communications. The Motley Fool has a disclosure policy.

Passive income investors are attracted to the robust dividend yields of Verizon (NYSE: VZ) and AT&T (NYSE: T).

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

*Stock prices used were the afternoon prices of July 7, 2025. The video was published on July 9, 2025.

Where to invest $1,000 right now

When our analyst team has a stock tip, it can pay to listen. After all, Stock Advisor’s total average return is 1,048%* — a market-crushing outperformance compared to 179% for the S&P 500.

They just revealed what they believe are the 10 best stocks for investors to buy right now, available when you join Stock Advisor.

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*Stock Advisor returns as of July 7, 2025

Parkev Tatevosian, CFA has no position in any of the stocks mentioned. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.  Parkev Tatevosian is an affiliate of The Motley Fool and may be compensated for promoting its services. If you choose to subscribe through his link, he will earn some extra money that supports his channel. His opinions remain his own and are unaffected by The Motley Fool.

Key Points

• Buffett's Berkshire Hathaway portfolio includes only one ultra-high-yield stock.

• However, his "secret portfolio" is loaded with ultra-high-yielders.

• The best of the bunch has increased its dividend for 30 consecutive years and has solid growth prospects.

Warren Buffett is known as a value investor, not as an income investor. However, that doesn't mean the "Oracle of Omaha" doesn't own stocks that many income investors would find highly attractive.

You might be surprised that Buffett even has positions in nine ultra-high-yield dividend stocks. By the way, the threshold used for a dividend yield to qualify as "ultra-high" is four times the yield of the SPDR S&P 500 ETF. Here are all of Buffett's ultra-high-yield dividend stocks, along with which one is the best of the bunch.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Berkshire Hathaway's sole ultra-high-yielder

Buffett's Berkshire Hathaway portfolio features only one ultra-high-yield dividend stock: Kraft Heinz (NASDAQ: KHC). The food and beverage company pays a forward dividend yield of 6%.

Kraft Heinz's dividend yield isn't so high because the company has increased its dividend payout. Instead, it's the result of a steadily deteriorating share price over the last few years, combined with maintaining the dividend at the same level during the period.

Berkshire does have stakes in a couple of other stocks with yields that aren't too far away from meeting the ultra-high threshold. Oil and gas giant Chevron offers a forward dividend yield of 4.61%. Satellite radio and podcast provider Sirius XM Holding's yield is 4.45%. However, the stocks didn't quite make the cut for our list.

Buffett's "secret portfolio"

Where can Buffett's other seven ultra-high-yield dividend stocks be found? In his "secret portfolio." I'm referring to the stocks owned by New England Asset Management (NEAM).

Berkshire Hathaway acquired General Re in 1998, which had acquired NEAM three years earlier. While NEAM reports its stock holdings to the U.S. Securities and Exchange Commission separately from Berkshire, Buffett owns all of the stocks in its portfolio just as much as he does any stock listed in Berkshire's SEC filings.

NEAM's two highest-yielding stocks are both business development companies (BDCs). Globus Capital BDC (NASDAQ: GBDC) pays an especially juicy forward dividend yield of 11.17%. It's followed by Ares Capital, the largest publicly traded BDC, with a yield of 8.57%.

A couple of big pharma stocks in Buffett's secret portfolio pay great dividends. Pfizer's (NYSE: PFE) forward dividend yield is 6.78%, while Bristol Myers Squibb (NYSE: BMY) offers a forward yield of 5.29%.

There's one ultra-high-yield overlap between Berkshire's and NEAM's portfolios -- Kraft Heinz. NEAM also owns another food company with an exceptionally high dividend payout. Campbell's (NASDAQ: CPB), which is best known for its soups, pays a forward dividend yield of 4.99%.

Two real estate investment trusts (REITs) are also in the mix. Realty Income's (NYSE: O) forward dividend yield is 5.6%. Lamar Advertising's (NASDAQ: LAMR) yield is 4.99%.

Finally, Buffett owns a stake in telecommunications giant Verizon Communications (NYSE: VZ) via NEAM's portfolio. Verizon's forward dividend yield is a lofty 6.22%.

The best of the bunch

How can we determine which of these ultra-high-yield dividend stocks owned by Buffett is the best of the bunch? We should obviously consider the dividend yield. In addition, the ability of the company to continue paying (and preferably increasing) its dividend is important. Growth prospects and valuation should be included, too. Based on these criteria, I think three of the nine stocks stand out above the rest.

Ares Capital's sky-high yield is a big plus. The BDC has either maintained or grown its dividend for 63 consecutive quarters (almost 16 years). It's the leader in the fast-growing private capital market. Ares Capital has also trounced the S&P 500 since its initial public offering in 2004.

Verizon is a longtime favorite for income investors. Its juicy dividend appears to be safe with the company's growing free cash flow. Verizon has also increased its dividend for 18 consecutive years. The biggest knock against the telecom provider is that its revenue and earnings growth haven't been spectacular. However, Verizon could enjoy stronger growth going forward once its acquisition of Frontier Communications closes.

The best stock overall of the group, in my opinion, is Realty Income. Its dividend yield is very attractive. Even better, the REIT pays its dividend monthly and has increased its dividend for an impressive 30 consecutive years.

Realty Income has delivered a positive total operational return every year since its IPO in 1994. Its diversified real estate portfolio, with nearly 1,600 clients representing 91 industries, helps make the company's cash flow stable. The REIT also has strong growth prospects, particularly in Europe, where it faces minimal competition.

The main drawback with this stock is its valuation. Realty Income's shares trade at 43 times forward earnings. However, I think the company's sterling track record justifies a premium price tag.

Should you invest $1,000 in Realty Income right now?

Before you buy stock in Realty Income, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Realty Income wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $699,558!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $976,677!*

Now, it’s worth noting Stock Advisor’s total average return is 1,060% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 30, 2025

Keith Speights has positions in Ares Capital, Berkshire Hathaway, Bristol Myers Squibb, Chevron, Pfizer, Realty Income, and Verizon Communications. The Motley Fool has positions in and recommends Berkshire Hathaway, Bristol Myers Squibb, Chevron, Pfizer, and Realty Income. The Motley Fool recommends Campbell's, Kraft Heinz, and Verizon Communications. The Motley Fool has a disclosure policy.

Key Points

• Ares Capital has delivered a long-term cumulative return that trounced the S&P 500.

• Enterprise Products Partners is resilient and has better long-term prospects than many might think.

• Verizon Communications has staying power and should be a key player in 6G wireless networks in the future.

True or false: The higher the dividend yield, the more worried you should be.

This is a tricky question, if not a trick question. With some stocks, a high dividend yield can be a cause for alarm. With other stocks, though, a high yield isn't concerning whatsoever.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

I own quite a few stocks with dividend yields of over 5%. I wouldn't necessarily commit to owning all of them over the next 20 years. However, here are three ultra-high-yield dividend stocks I don't plan on ever selling.

1. Ares Capital

Ares Capital (NASDAQ: ARCC) is the largest publicly traded business development company (BDC). The company has invested more than $17 billion since its inception in 2004. The BDC focuses on middle-market companies with annual revenue between $10 million and $1 billion.

I really like Ares Capital's dividend, with its forward yield of 8.63%. Even better, the company has either maintained or grown its dividend for 63 consecutive quarters -- a streak that I'm confident will continue.

But I probably wouldn't plan on never selling this stock if all that it had going for it was its juicy dividend. A key factor behind my intention to own Ares Capital over the long run is its position in a growing market. There has been a clear shift in recent years to private capital. Ares Capital targets a total addressable market of around $5.4 trillion. I think it's easily the best BDC around, with its diversified portfolio, strong industry relationships, and rock-solid risk management.

I'm also impressed by Ares Capital's performance. Since its initial public offering (IPO), it has delivered a cumulative total return that's 80% higher than the S&P 500. Maybe the stock won't be able to continue beating the market so handily going forward, but I wouldn't bet against it.

2. Enterprise Products Partners

Enterprise Products Partners (NYSE: EPD) is a master limited partnership (MLP) that is a leader in the North American midstream energy industry. It operates more than 50,000 miles of pipeline in addition to numerous other assets.

Many MLPs pay highly attractive distributions. Enterprise Products Partners is no exception, with its forward distribution yield of 6.81%. Even better, the company has increased its distribution for 26 consecutive years.

Am I crazy to believe that I can own a stock that's dependent on fossil fuels for years to come? I don't think so. Sure, renewable energy sources will almost certainly be more widely used in the future. However, the demand for oil and gas (especially natural gas and natural gas liquids) should continue to grow for decades to come. That means the demand should remain strong for Enterprise Products Partners' pipelines.

This MLP has already proved its resilience. Enterprise Products Partners delivered steady cash flow per unit during every major crisis affecting the oil and gas industry over the last two decades.

3. Verizon Communications

While you might not have heard of Ares Capital or Enterprise Products Partners, odds are that you're quite familiar with Verizon Communications (NYSE: VZ). The telecommunications giant serves millions of customers worldwide.

Many income investors will especially like Verizon. Its forward dividend yield is a lofty 6.22%. The company has also increased its dividend for 18 consecutive years.

I've tried to picture a world where wireless services from companies like Verizon aren't needed, but my imagination just isn't that good. I also seriously doubt any new competition will arise in this market, considering the massive amount of capital required to build out wireless networks. The bottom line is that I believe Verizon has staying power.

Will Verizon be a huge growth machine? Probably not. However, 6G is on the way -- probably by the end of the decade. This new higher-speed wireless protocol could hold the potential for holographic communication, immersive extended reality (think augmented reality and virtual reality at a whole new level), and more. I fully expect Verizon will be a major player in 6G and could deliver more impressive growth in the future.

Should you invest $1,000 in Ares Capital right now?

Before you buy stock in Ares Capital, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Ares Capital wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $699,558!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $976,677!*

Now, it’s worth noting Stock Advisor’s total average return is 1,060% — a market-crushing outperformance compared to 180% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 30, 2025

Keith Speights has positions in Ares Capital, Enterprise Products Partners, and Verizon Communications. The Motley Fool recommends Enterprise Products Partners and Verizon Communications. The Motley Fool has a disclosure policy.

Key Points

• SCHD and GCOW focus on higher-yielding dividend stocks.

• The ETFs have different strategies for selecting those stocks.

• They also have different fees and return profiles.

Many exchange-traded funds (ETFs) focus on holding dividend-paying stocks. While that gives income-seeking investors lots of options, it can make it difficult to know which is the best one to buy.

The Schwab U.S. Dividend Equity ETF (NYSEMKT: SCHD) and Pacer Global Cash Cows Dividend ETF (NYSEMKT: GCOW) are two notable dividend ETFs. Here's a look at which is the better one to buy for those seeking to generate passive income.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

Different strategies for selecting high-yielding dividend stocks

The Schwab U.S. Dividend Equity ETF and the Pacer Global Cash Cows Dividend ETF aim to provide their investors with above-average dividend income by holding higher-yielding dividend stocks. The ETFs each hold roughly 100 dividend stocks. However, they use different strategies to select their holdings.

The Schwab U.S. Dividend Equity ETF aims to track the returns of the Dow Jones U.S. Dividend 100 Index. That index screens U.S. dividend stocks based on four quality characteristics:

• Cash flow to debt.
• Return on equity (ROE).
• Indicated dividend yield.
• Five-year dividend growth rate.

The index selects companies that have stronger financial profiles than their peers. That should enable them to deliver sustainable and growing dividends, and the Schwab U.S. Dividend ETF accordingly provides investors with a higher-yielding current dividend that should grow at an above-average rate. At its annual reconstitution, its 100 holdings had an average dividend yield of 3.8% and a five-year dividend growth rate of 8.4%.

The Pacer Global Cash Cows Dividend ETF uses a different strategy for selecting its 100 high-yielding dividend stocks. It starts by screening the 1,000 stocks in the FTSE Developed Large-Cap Index for the 300 companies with the highest free cash flow yield over the past 12 months. It screens those stocks for the 100 highest dividend yields. It then weights those 100 companies in the fund from highest yield to lowest, capping its top holding at 2%. At its last rebalance, which it does twice a year, its 100 holdings had an average free cash flow yield of 6.3% and a dividend yield of 5%.

Here's a look at how the top holdings of these ETFs currently compare:

SCHD	GCOW
ConocoPhillips, 4.4%	Phillip Morris, 2.6%
Cisco Systems, 4.3%	Engie, 2.6%
Texas Instruments, 4.2%	British American Tobacco, 2.4%
Altria Group, 4.2%	Equinor, 2.2%
Coca-Cola, 4.1%	Gilead Sciences, 2.2%
Chevron, 4.1%	Nestle, 2.2%
Lockheed Martin, 4.1%	AT&T, 2.2%
Verizon, 4.1%	Novartis, 2.1%
Amgen, 3.8%	Shell, 2.1%
Home Depot, 3.8%	BP, 2%

Data sources: Schwab and Pacer.

Given their different strategies for selecting dividend stocks, the funds have very different holdings. SCHD holds only companies with headquarters in the U.S., while GCOW takes a global approach. U.S. stocks make up less than 25% of its holdings. Meanwhile, SCHD weights its holdings based on their dividend quality, while GCOW weights them based on dividend yield. Given its focus on yield, GCOW offers investors a higher current income yield at 4.2%, compared with 3.9% for SCHD.

Costs and returns

While SCHD and GCOW focus on higher-yielding dividend stocks, their strategies in selecting holdings have a major impact beyond the current dividend income. Because SCHD is a passively managed ETF while GCOW is an actively managed fund, SCHD has a much lower ETF expense ratio than GCOW. SCHD's is just 0.06%, compared with GCOW's 0.6%. Put another way, every $10,000 invested would incur $60 in management fees each year if invested in GCOW, compared with only $6 in SCHD.

GCOW's higher fee really eats into the income the fund generates, which affects its returns over the long term. The fund's current holdings actually have a 4.7% dividend yield, whereas the fund's latest payout had only a 4.2% implied yield.

ETF	1-Year	3-Year	5-Year	10-Year	Since Inception
GCOW	11.2%	8.4%	15.5%	N/A	8.8%
SCHD	3.8%	3.7%	12.2%	10.6%	12.2%

Data sources: Pacer and Schwab. Note: GCOW's inception date is 2/22/16, while SCHD's is 10/20/11.

GCOW has outperformed SCHD over the past five years. However, SCHD has delivered better performance over the longer term. That's due to its lower costs and focus on companies that grow their dividends, which tend to produce the highest total returns over the long term.

SCHD is a better ETF for passive income

SCHD and GCOW hold higher-yielding dividend stocks, making either ETF ideal for those seeking passive income. However, SCHD stands out as the better one to buy because of its focus on dividend sustainability and growth. It also has a much lower ETF expense ratio. So it should provide investors with an attractive and growing stream of passive dividend income.

Should you invest $1,000 in Schwab U.S. Dividend Equity ETF right now?

Before you buy stock in Schwab U.S. Dividend Equity ETF, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Schwab U.S. Dividend Equity ETF wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $692,914!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $963,866!*

Now, it’s worth noting Stock Advisor’s total average return is 1,050% — a market-crushing outperformance compared to 179% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 30, 2025

Matt DiLallo has positions in Chevron, Coca-Cola, ConocoPhillips, Gilead Sciences, Schwab U.S. Dividend Equity ETF, and Verizon Communications. The Motley Fool has positions in and recommends Amgen, Chevron, Cisco Systems, Gilead Sciences, and Texas Instruments. The Motley Fool recommends BP, British American Tobacco, Equinor Asa, Lockheed Martin, Nestlé, Philip Morris International, and Verizon Communications and recommends the following options: long January 2026 $40 calls on British American Tobacco and short January 2026 $40 puts on British American Tobacco. The Motley Fool has a disclosure policy.

The Dow Jones Industrial Average tracks 30 large, publicly traded blue chip stocks. These companies are some of the strongest and most well-known in the country. They tend to be lower-risk companies, most of which pay dividends. Because of that, Dow stocks can be a great choice for those seeking reliable dividend income.

Of the 30 Dow stocks, Verizon (NYSE: VZ) stands out for its high dividend yield. At over 6%, it's more than triple the average dividend yield of Dow stocks (less than 2%). That makes the telecom giant an ideal dividend stock to buy for passive income this month.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More »

A lower-risk, high-yielding dividend stock

A high dividend yield can sometimes suggest that a company has a higher risk profile. However, that's not the case with Verizon. The telecom giant produces prodigious cash flows and boasts a rock-solid financial profile.

Last year, Verizon generated $36.9 billion in cash flow from operations. It invested $17.1 billion into capital projects to maintain and expand its 5G and fiber networks. That left Verizon with $19.8 billion in free cash flow, which easily covered the company's $11.2 billion in dividend payments to shareholders.

The remaining excess free cash flow enabled the telecom giant to strengthen its already solid balance sheet. Its leverage ratio fell from 2.6 times at the end of 2023 to 2.3 times at the end of last year. That's a solid leverage ratio for a company that generates stable cash flow. It backs the company's strong A-/BBB+/Baa1 bond ratings. Verizon's long-term goal is to have an even lower leverage ratio in the range of 1.75x to 2.0x, putting it on an even stronger financial foundation.

More dividend growth ahead

Verizon's robust cash flows and strong financial profile have enabled the company to steadily increase its dividend. Last September, the company delivered its 18th consecutive annual dividend increase, raising its payment by around 2%. That's the longest current streak in the U.S. telecom sector.

The company should be able to continue increasing its dividend in the future. It's investing heavily in 5G and fiber to provide faster wireless and broadband services to customers. That strategy is driving the company's financial growth this year. Its wireless services revenue rose 2.7% in the first quarter to an industry-leading $20.8 billion.

Meanwhile, its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased by 4% to $12.6 billion, the highest in the company's history. Verizon also produced $3.6 billion in free cash flow after capital expenses in the first quarter, a 34% jump compared to the year-ago period.

Verizon has budgeted between $17.5 billion and $18.5 billion for capital expenditures this year to maintain and expand its network. That will leave it with $17.5 billion to $18.5 billion in free cash flow, more than enough to cover its dividend and continue strengthening its balance sheet.

The company is using some of its financial flexibility to acquire Frontier Communications in a $20 billion all-cash deal that it hopes to close early next year. The acquisition will significantly expand its fiber network while generating at least $500 million in annual cost savings. Verizon will use its growing excess free cash flow to repay the debt it will take on to close that deal. It should return to its current level within two years of closing the acquisition. That would free up additional cash that Verizon could use to repurchase stock.

The growing free cash flow from its capital investments and the Frontier deal should enable Verizon to continue to steadily increase its high-yielding dividend.

A bankable passive income stream

Verizon is a rare high-yielding blue chip dividend stock. It provides investors with a bond-like income stream with some upside potential from a rising dividend and the possibility of an increasing stock price. These features make it an ideal option for those seeking a bankable income stream backed by a top Dow stock.

Should you invest $1,000 in Verizon Communications right now?

Before you buy stock in Verizon Communications, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Verizon Communications wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $669,517!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $868,615!*

Now, it’s worth noting Stock Advisor’s total average return is 792% — a market-crushing outperformance compared to 173% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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Matt DiLallo has positions in Verizon Communications. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.

Explore the exciting world of Verizon (NYSE: VZ) with our expert analysts in this Motley Fool Scoreboard episode. Check out the video below to gain valuable insights into market trends and potential investment opportunities!
*Stock prices used were the prices of April 30, 2025. The video was published on Jun. 5, 2025.

Should you invest $1,000 in Verizon Communications right now?

Before you buy stock in Verizon Communications, consider this:

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Verizon Communications wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $668,538!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $869,841!*

Now, it’s worth noting Stock Advisor’s total average return is 789% — a market-crushing outperformance compared to 172% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 2, 2025

Anand Chokkavelu, CFA has no position in any of the stocks mentioned. Jason Hall has no position in any of the stocks mentioned. Toby Bordelon has positions in Verizon Communications. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.

AT&T (NYSE: T) and Verizon (NYSE: VZ), two of the largest telecom companies in America, are both often considered stable income stocks. But over the past three years, AT&T's stock rallied nearly 50%, as Verizon's stock declined 5%. After reinvesting their dividends, AT&T delivered a total return of more than 75%, as Verizon generated a total return of just 15%.

Let's see why AT&T outperformed Verizon by such a wide margin, and if it's still the more reliable dividend play today.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

The differences between AT&T and Verizon

AT&T and Verizon both generate most of their revenue from their wireless businesses. At the end of the first quarter of 2025, AT&T and Verizon served 118 million and 146 million wireless (both postpaid and prepaid) subscribers, respectively.

AT&T grew its wireless postpaid business by 1.7 million subscribers in 2023, 1.7 million subscribers in 2024, and another 324,000 subscribers in the first quarter of 2025.

AT&T spun off DirecTV, Time Warner, and its smaller media assets over the past few years to focus on expanding its 5G wireless and fiber businesses. That back-to-basics approach sharpened its competitive edge and freed up a lot of cash. Its fiber business also added 1.1 million connections in 2023, another 1 million connections in 2024, and 261,000 connections in the first quarter of 2025.

The rapid growth of its 5G and fiber segment offset the softness of its business wireline segment, which is still struggling to stay relevant as more businesses transition from wired network connections toward cloud and wireless services.

Verizon's wireless business gained 286,000 postpaid subscribers in 2023 and 731,000 subscribers in 2024 -- but it abruptly lost 289,000 subscribers in the first quarter of 2025.

Verizon attributed that decline to tough competition and big promotions at AT&T and T-Mobile. The company tried to keep up by slashing its prices and offering more competitive bundles, but it hiked its prices again at the beginning of 2025 to boost its subscriber revenues. That move, along with the recent federal layoffs, exacerbated Verizon's loss of wireless subscribers.

Like AT&T, Verizon expanded its broadband internet segment by adding 248,000 Fios subscribers in 2023, another 208,000 subscribers in 2024, and 45,000 subscribers in the first quarter of 2025. However, that segment still isn't growing fast enough to offset its loss of wireless subscribers or the ongoing decline of its business wireline segment.

Which company has a healthier dividend?

AT&T pays a forward dividend yield of 4%, while Verizon pays a higher forward yield of 6.3%. However, AT&T's yield declined as its stock rallied, while Verizon's yield rose as its stock fell. AT&T nearly halved its dividend in 2022, after it spun off WarnerMedia and merged it with Discovery to create Warner Bros. Discovery. It hasn't raised its dividend since then. Verizon has raised its dividend annually for 18 consecutive years.

We can gauge the health of a company's dividend with its cash dividend payout ratio, or the percentage of its free cash flow (FCF) it pays out as dividends. Verizon has a higher ratio, but both companies can easily afford to raise their dividends.

Source: YCharts

In 2024, Verizon's FCF rose 6% to $19.8 billion, but it expects that figure to dip to $17.5 billion-$18.5 billion this year. AT&T's FCF grew 5% to $17.6 billion in 2024, but it also anticipates a decline to about $16 billion in 2025.

Both companies expect their increased 5G and fiber investments, along with higher tax rates, to throttle their near-term FCF growth, but AT&T's FCF decline will be exacerbated by the planned sale of its remaining 70% stake in DirecTV this year.

But which company has a brighter future?

For 2025, AT&T expects its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) to rise at least 3%. Verizon expects 2%-3.5% growth. With an enterprise value of $312 billion, AT&T trades at 6.8 times this year's adjusted EBITDA. Verizon, which is worth $318 billion, trades at 6.4 times this year's adjusted EBITDA.

Verizon is the cheaper stock with the higher dividend, but its wireless business faces tougher near-term challenges than AT&T's. That means a lot of its near-term earnings growth could be driven by cost-cutting measures and price hikes instead of new subscribers. So unless Verizon can start gaining more wireless postpaid subscribers, it could continue to underperform AT&T.

The better buy: AT&T

Verizon's downside might be limited at these levels, but AT&T's stronger wireless growth makes it the better dividend stock right now -- even though it pays a lower yield and hasn't raised its payout since its spinoff of Warner Bros. Discovery. However, I might change my mind if Verizon gets its act together and finds more ways to grow in this tough promotional environment.

Should you invest $1,000 in AT&T right now?

Before you buy stock in AT&T, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and AT&T wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $623,685!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $701,781!*

Now, it’s worth noting Stock Advisor’s total average return is 906% — a market-crushing outperformance compared to 164% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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*Stock Advisor returns as of May 5, 2025

Leo Sun has positions in Verizon Communications. The Motley Fool has positions in and recommends Warner Bros. Discovery. The Motley Fool recommends T-Mobile US and Verizon Communications. The Motley Fool has a disclosure policy.

Special things can happen when sleepy stocks start to wake up. Looking back the past few years, there may not seem to be a lot that's interesting when it comes to Coca-Cola (NYSE: KO), Disney (NYSE: DIS), and Verizon (NYSE: VZ). They're all names that most investors and consumers know, but they have a long history of slow growth.

The three stocks make up 10% of the names in the Dow Jones Industrial Average (DJINDICES: ^DJI). The iconic market gauge isn't typically a hotbed of big gainers, but I think Coca-Cola, Disney, and Verizon can beat the market for the balance of this year and beyond. Let's take a closer look.

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1. Coca-Cola

The story for the pop star isn't as sparkling as its namesake offering at first glance. Consumers have been cutting back on sugary beverages. Revenue has declined in more than half of the past dozen years. With the shares trading for 24 times forward earnings, it might not seem cheap given its sluggish fiscal performance.

Thankfully, there's a lot of fizz in the flatness. Coca-Cola is resonating with investors in the current climate. It's the biggest gainer among all 30 of the Dow stocks this year, the only one posting a double-digit rise in a challenging 2025 backdrop for investors. Despite being a global juggernaut, it's not as tariff-susceptible as most consumer-facing businesses. Most Coca-Cola beverages are bottled and distributed locally. It's also relatively recession-proof given the low price for refreshing escapism.

The story gets better if you zoom in a bit, a tall order for a company that's been around for 135 years. I pointed out that revenue has declined in seven of the past 12 years, but it has actually risen in the past four years. Two of those four years treated investors to rare double-digit top-line jumps.

The beverage stock reports its first-quarter results on Tuesday morning. The bulls have momentum. Coca-Cola has a knack for exceeding expectations. It has posted modest single-digit percentage beats through 2024. Can it keep the positive surprises going into 2025 and beyond?

Period	EPS Estimate	Actual EPS	Surprise
Q1 2024	$0.70	$0.72	3%
Q2 2024	$0.81	$0.84	4%
Q3 2024	$0.75	$0.77	3%
Q4 2024	$0.52	$0.55	6%

Data source: Yahoo! Finance. EPS = earnings per share (adjusted).

Now let's zoom out again. Despite the U.S. trend away from colas and even diet sodas, Coca-Cola has built up a portfolio of about 200 brands covering carbonated sodas, hydration, coffee, tea, juice, dairy, and, more recently, alcoholic offerings through low-risk partnerships. It boosted its dividend two months ago, something it has now done for a confidence-inspiring 63 consecutive years. Despite more than six decades of annual increases, its payout ratio remains under 70%. In short, the quarterly distributions should continue to move higher.

The business works. Its flagship soft drink business remains a lucrative money machine, selling its syrupy concentrate to a global network of largely independent distributors. Net margin has been 22% or better for six straight years. You may want to wait until its quarterly update this week to make sure that its outlook remains effervescent, but Coca-Cola is winning this year because it's positioned well for whatever is coming around the corner.

2. Disney

At the other end of the consumer spectrum, Disney isn't faring as well as the king of pop. The House of Mouse is among the 60% of Dow 30 stocks trading lower in 2025. Its realm of global premium-priced theme parks are naturally not sheltered from the current trade war or recessionary whispers.

However, there's still a lot to like when it comes to Disney. Content still matters, and Disney's studio remains the ultimate tastemaker. It had all three of the world's highest-grossing theatrical releases this year, and it has a strong slate of films coming out in the final eight months of 2025. With its popular Disney+ streaming platform turning profitable, the media giant is likely to see strong earnings growth that will outpace its modest revenue moves.

Analysts see revenue inching just 3% higher in the fiscal year that ends in five months, accelerating to a 5% increase in fiscal 2026. Those same pros see earnings per share rising 10% and 11%, respectively, in those fiscal periods. Disney stock is lagging the market for the fourth time in the past five years, but that makes the valuation even more compelling. The shares are trading for less than 15 times next year's earnings estimates, a historical bargain for a company that has earned its right to a market premium given decades of industry-leading content creation.

3. Verizon

Let's bring this home with Verizon. The wireless carrier is the highest yielding Dow stock with its juicy 6.5% yield. Growth for the telcos has been uninspiring. Verizon hasn't been able to top 6% growth in each of the past 15 years, and that includes slight dips in back-to-back years. Wall Street pros see revenue growth clocking in just shy of 2% in each of the next two years.

Reality hasn't lived up to the hype for Verizon and its peers. Major investments in 5G technology and other infrastructure updates haven't resulted in next-level growth. The upside is that folks aren't going to get rid of their wireless service anytime soon. Tariffs may make new smartphones more expensive, but providing connectivity is the moneymaker here. Despite the admittedly substantial debt, Verizon is still trading for less than nine times forward earnings. In other words, its streak of 18 years of dividend increases is likely to continue. It's a smart call.

Should you invest $1,000 in Coca-Cola right now?

Before you buy stock in Coca-Cola, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Coca-Cola wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $594,046!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $680,390!*

Now, it’s worth noting Stock Advisor’s total average return is 872% — a market-crushing outperformance compared to 160% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

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Rick Munarriz has positions in Verizon Communications and Walt Disney. The Motley Fool has positions in and recommends Walt Disney. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.

Verizon (NYSE: VZ) just reported its earnings for the first quarter of 2025. The telecom company improved its revenue and profits, but not at levels that impressed investors. With that, the stock fell amid higher-than-expected cancellations.

Nonetheless, Verizon's long-term problems are likely the issue weighing on its stock performance. Until the company addresses those, the telecom stock is likely to struggle. Here's why.

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Verizon's Q1 earnings

At first glance, Verizon delivered a stock performance that was consistent and typical for a mature company such as this. The $33.5 billion it earned in revenue was 1.5% higher than the year-ago level.

Also, Verizon held the line on operating expense growth, limiting it to 0.2%. Despite lower income from other sources and higher income tax expenses, Verizon delivered just under $5 billion in quarterly net income, a 5.5% increase from the same quarter in 2023.

Moreover, what was probably the most impressive number was free cash flow, which climbed to $3.6 billion in Q1, up from $2.7 billion in the same quarter last year. Verizon has just under $2.9 billion in quarterly dividend expenses, which should presumably reassure income investors concerned about the safety of its payout.

Still, investors focused more on subscriber numbers, which pointed to some struggle. The company lost 289,000 subscribers last quarter, well above the 197,000 that analysts had expected.

This is notable, as Verizon is a domestic business and, thus, does not face any direct threats from tariffs, though struggling consumers may look for lower-cost plans as a way to deal with rising costs.

Ongoing challenges

However, the concerns about Verizon stock seem to be more subtle but well-known. One issue is the ongoing strains of market competition. The need to avoid falling behind AT&T and T-Mobile forces it to invest heavily in maintaining and upgrading its network.

To this end, it spent $4.1 billion on capital expenditures in Q1. The company subtracts that expenditure from free cash flow, and indeed, its competitors have to make similar expenditures.

Nonetheless, it weighs on a company that has to service $143.6 billion in total debt. That's a tremendous burden on the balance sheet, considering the $102 billion in total equity.

Additionally, that debt fell by only $365 million during the quarter, resulting in $1.6 billion in interest costs over the same period. That rightly leaves investors questioning whether the company should cut the dividend to apply some of the $2.9 billion it spends quarterly on payouts to debt reduction.

Verizon currently offers a yearly payout of $2.71 per share, a dividend yield of 6.4%. That's more than quadruple the S&P 500's yield of just under 1.5%.

Furthermore, that dividend looks increasingly like a trap. Verizon has had the worst-performing stock among the three major telcos, meaning shareholders seem to own it for its payout. Since the dividend has risen for 18 consecutive years, the annual payout hikes likely contribute to its popularity as an income stock.

VZ Total Return Level data by YCharts.

Investors should also remember that AT&T walked away from a 35-year track record of payout hikes when its financial troubles forced it to cut its dividend. While the stock dropped for two years after its dividend cut, it has experienced a resurgence since mid-2023. That could make Verizon's management reconsider its dividend stance.

Moving forward with Verizon stock

Despite a mixed Q1 report, long-term issues remain the biggest challenge for Verizon stock. Indeed, Verizon stock is up by nearly 35% since bottoming in late 2023. Additionally, at a price-to-earnings (P/E) ratio of 10, it looks like a bargain.

Unfortunately, the 6.4% dividend yield that makes Verizon attractive to income investors could also be a target as the company looks for ways to reduce its massive total debt. Moreover, it is unclear whether a low P/E ratio would limit the downside of this stock if it were to trim its payout.

Hence, while the latest earnings report points to business as usual, investors should focus more on the company's longer-term problems and base their investment decisions on those.

Should you invest $1,000 in Verizon Communications right now?

Before you buy stock in Verizon Communications, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Verizon Communications wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $591,533!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $652,319!*

Now, it’s worth noting Stock Advisor’s total average return is 859% — a market-crushing outperformance compared to 158% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 21, 2025

Will Healy has no position in any of the stocks mentioned. The Motley Fool recommends T-Mobile US and Verizon Communications. The Motley Fool has a disclosure policy.

The most closely watched metric for Verizon Communications (NYSE: VZ) during earnings season isn't the company's revenue or profits. Instead, it tends to be its postpaid phone subscriber numbers. Postpaid subscribers have wireless plans that are billed monthly, as opposed to prepaid subscribers, who pay for their services upfront.

Prepaid subscribers generally are not as affluent, and the business has much more churn. Meanwhile, its consumer and business wireline businesses are in decline. Broadband is a growth business, but the focus still tends to be on its core postpaid wireless business, as this is the gateway to its other offerings.

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On the postpaid wireless front, the company disappointed. After adding 568,000 wireless postpaid phone net additions in Q4 2024, it lost 289,000 in Q1 2025. The first quarter tends to see churn; in Q1, it lost 114,000 postpaid phone subscribers last year. However, the decline was worse than the loss of 197,000 subscribers that analysts were expecting.

Much of this appears to stem from price hikes, as the company's total wireless service revenue rose 2.7% to $20.8 billion despite the churn in customers. However, the company said that it saw mid-single-digit consumer postpaid phone gross additions in March and that its performance thus far in April has been strong. It noted that its new three-year price lock and free phone guarantee were starting to resonate with customers.

It also highlighted its new myPlan and myHome plans, which allow customers to customize their plans and add perks, such as discounted streaming services or unlimited cloud storage. myPlan is for mobile customers, while myHome is for broadband customers.

Broadband continued to be an area of strength in Q1, with 339,000 net additions in the quarter. This included 45,000 Fios internet net additions and 308,000 fixed wireless additions. Overall, it said total broadband connections increased by 13.7% year over year to 12.8 million, with 4.8 million of those being fixed wireless access subscribers.

It plans to deliver 650,000 incremental Fios passings this year while continuing to expand its C-band deployment. C-band is a wireless spectrum that Verizon is using to deliver its fixed mobile broadband solution and enhance its mobile wireless solution. C-band provides broadband internet service to areas that don't have traditional infrastructure.

Overall, Verizon continued to deliver steady results. Its overall revenue rose by 1.5% to $33.5 billion, while its adjusted EPS increased 3.5% to $1.19. That was just ahead of the analyst consensus for adjusted EPS of $1.15 on revenue of $33.3 billion. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), meanwhile, rose 4.1% to $12.6 billion.

Looking ahead, Verizon maintained its full-year 2025 guidance. It continues to expect wireless revenue growth to be between 2% and 2.8% and for adjusted EPS to increase by 0% to 3%. The company projects operating cash flow to be between $35 billion and $37 billion after spending about half of that on capital expenditures (capex) to result in free cash flow between $17.5 billion and $18.5 billion.

A dividend darling

One of the things that most attracts investors to Verizon is its dividend. It has a robust forward dividend yield of about 6.4%, which is a nice payout in this environment.

The dividend remains well covered, with the company paying $2.85 billion in dividends in Q1 while it generated $3.63 billion in free cash flow. That's good for a nearly 1.3x coverage ratio. Over the past 12 months, it's generated free cash flow of $18.73 billion and paid out $11.03 billion in dividends, good for a 1.8 times coverage ratio. That gives the company plenty of room to continue to both invest in its business and increase its dividend moving forward.

The company's balance sheet also remains in solid shape with a leverage ratio on unsecured debt (net unsecured debt/trailing-12-month adjusted EBITDA) of 2.3.

With Verizon forecasting $17.5 billion to $18.5 billion in free cash flow this year, the company has a wide cushion to continue to increase its dividend, even if a weaker economic environment negatively impacts its results.

Is it time to buy the stock?

While Verizon's recent price hike caused some elevated churn in the most recent quarter, postpaid wireless subscriber additions look like they have been back on track for the last couple of months. Meanwhile, its three-year price lock and phone upgrade plan looks like an attractive offering that can drive subscriber growth.

At the same time, the company continues to do well by adding broadband customers. Its fixed wireless C-band offering allows it to target households in areas without fiber or cable broadband services. It is also a nice alternative option for customers who have cut the cord with cable but who are still beholden to their cable company's broadband options.

Turning to valuation, Verizon trades at a forward price-to-earnings (P/E) ratio of 9 based on 2025 earnings estimates, which is well below the nearly 13 times multiple of AT&T. With very similar overall growth metrics as AT&T, I think Verizon is the better buy and remains a solid, defensive dividend stock.

I wouldn't get caught up in one quarter of weak postpaid subscriber growth, as the overall picture at Verizon remains solid.

Should you invest $1,000 in Verizon Communications right now?

Before you buy stock in Verizon Communications, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Verizon Communications wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $591,533!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $652,319!*

Now, it’s worth noting Stock Advisor’s total average return is 859% — a market-crushing outperformance compared to 158% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of April 21, 2025

Geoffrey Seiler has no position in any of the stocks mentioned. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.

The stock market recently took a big dip, driven down by concerns about how much tariffs will affect the economy. One of the benefits of falling stock prices is that dividend yields move in the opposite direction. That allows investors to lock in even higher yields on some high-quality dividend stocks.

I recently capitalized on the dip in the market to deploy some cash in my retirement account to add to my position in several top-notch dividend stocks, including VICI Properties (NYSE: VICI), Verizon (NYSE: VZ), and Genuine Parts Company (NYSE: GPC). Here's why I think they are low-risk stocks to buy amid the current market turmoil.

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A low-risk wager on a steadily growing income stream

Amid the market downturn, VICI Properties' stock has dipped more than 10% from its recent peak. That has driven up the dividend yield of the real estate investment trust (REIT) to 5.7%, well above the S&P 500's 1.5% yield.

The REIT's high-yielding payout is on a very safe footing. It produces very stable cash flow from its portfolio of high-quality experiential real estate, like casinos and sports and entertainment complexes.

It leases these properties to operating tenants under very long-term triple net leases (NNNs), which currently have an average remaining term of 41 years. An increasing percentage of its leases index rents to inflation (42% this year, rising to 90% by 2035). Because of that, it generates very stable and growing rental income.

VICI Properties has a very strong financial profile that gives it the flexibility to continue investing in income-producing experiential real estate. Its growing portfolio enables the REIT to increase its dividend. It has raised it for seven straight years (every year since its formation), at a 7% compound annual rate, well above the 2% average annual rate of its net lease peers.

A cash flow machine

Verizon's shares have slumped more than 7% from their recent peak. That has pushed the telecom giant's dividend yield up to 6.3%. That high-yielding dividend is super safe.

Verizon produces lots of durable cash flow as businesses and consumers pay their wireless and broadband bills. The company earned $36.9 billion in cash flow from operations last year and $19.8 billion in free cash flow (FCF) after funding capital expenditures, which was more than enough to cover its dividend outlay of $11.2 billion. Verizon used the remaining excess FCF to strengthen its already rock-solid balance sheet.

The company is using some of its financial flexibility to acquire Frontier Communications in a $20 billion all-cash deal to bolster its broadband network. That deal and the continued capital investments to organically grow its fiber and 5G networks put Verizon in position to grow its revenue and cash flow in the future.

That should enable the company to continue increasing its dividend, which it has done for a sector-leading 18 years in a row.

Decades of dividend growth prove its resiliency

Genuine Parts Company has sold off sharply during the recent market downdraft, falling over 30%. That slump pushed the automotive and industrial parts distributor's dividend yield up to 3.7%.

There are some concerns that tariffs could have a meaningful impact on the automotive sector, given the volume of parts imported into the country. While this headwind could affect Genuine Parts' business, it has weathered adverse conditions before, demonstrating its resilience by increasing its dividend for 69 years in a row.

The company has a strong financial profile to support its high-yielding dividend amid the current market uncertainty. Last year, Genuine Parts produced $1.3 billion in cash flow from operations and $684 million in FCF. That was more than enough to cover the $555 million it paid in dividends.

It has a strong balance sheet with lots of liquidity ($2 billion, including $480 million of cash and equivalents). That gives it a lot of financial flexibility to continue investing in growing its business and making acquisitions, including buying independent NAPA Auto Parts stores in the top markets.

These investments should help grow its revenue and cash flow over the long term, supporting the continued rise in its dividend.

High-quality, high-yielding dividend stocks

Shares of VICI Properties, Verizon, and Genuine Parts Company have dipped during the recent stock market sell-off, which has pushed their dividend yields even higher. Given the durability of their cash flows and the strength of their financial profiles, those payouts are very safe. That's why I've capitalized on the recent sell-off to buy even more shares for my retirement account to increase the amount of their super-safe income that I will collect in the years to come.

Don’t miss this second chance at a potentially lucrative opportunity

Ever feel like you missed the boat in buying the most successful stocks? Then you’ll want to hear this.

On rare occasions, our expert team of analysts issues a “Double Down” stock recommendation for companies that they think are about to pop. If you’re worried you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:

• Nvidia: if you invested $1,000 when we doubled down in 2009, you’d have $244,570!*
• Apple: if you invested $1,000 when we doubled down in 2008, you’d have $35,715!*
• Netflix: if you invested $1,000 when we doubled down in 2004, you’d have $461,558!*

Right now, we’re issuing “Double Down” alerts for three incredible companies, and there may not be another chance like this anytime soon.

Continue »

*Stock Advisor returns as of April 5, 2025

Matt DiLallo has positions in Genuine Parts, Verizon Communications, and Vici Properties. The Motley Fool recommends Genuine Parts, Verizon Communications, and Vici Properties. The Motley Fool has a disclosure policy.