Analysis of High-Yield Stock Investment Strategies
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Source: Fool
- REIT Stability: Realty Income, the world's sixth-largest REIT, owns over 15,500 properties with top tenants like Dollar General and FedEx, boasting a forward dividend yield of 5.1%, and its impressive track record of 30 consecutive years of dividend increases underscores its stability and growth potential.
- Delivery Giant Resilience: United Parcel Service has never cut its dividend since going public in 1999, currently offering a 5.6% dividend yield, with projected free cash flow of $6.5 billion in 2023, sufficient to cover $5.4 billion in dividends, highlighting its strong financial health and growth prospects.
- Telecom Growth Potential: Verizon Communications offers a 6.1% dividend yield and has increased its dividend for 19 consecutive years, with free cash flow expected to rise to $21.5 billion in 2026, indicating robust growth following its acquisition of Frontier Communications, which strengthens its market position.
- Market Volatility and Investment Strategy: Despite increasing market volatility and concerns over a potential AI stock bubble, high-yield stocks like Realty Income, UPS, and Verizon present attractive options for investors, particularly in uncertain economic conditions due to their stability and growth potential.
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Analyst Views on VZ
Wall Street analysts forecast VZ stock price to fall over the next 12 months. According to Wall Street analysts, the average 1-year price target for VZ is 46.42 USD with a low forecast of 43.00 USD and a high forecast of 51.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
14 Analyst Rating
4 Buy
10 Hold
0 Sell
Moderate Buy
Current: 47.100
Low
43.00
Averages
46.42
High
51.00
Current: 47.100
Low
43.00
Averages
46.42
High
51.00
About VZ
Verizon Communications Inc. is a holding company. The Company, through its subsidiaries, provides communications, technology, information and streaming products and services to consumers, businesses and government entities. Its Consumer segment provides wireless and wireline communications services. It also provides fixed wireless access (FWA) broadband through its 5G or 4G Long-Term Evolution (LTE) networks portfolio. The Company's Business segment provides wireless and wireline communications services and products, including FWA broadband, data, video and advanced communication services, corporate networking solutions, security and managed network services, local and long-distance voice services and network access to deliver various Internet of Things (IoT) services and products. It provides these products and services to businesses, public sector customers and wireless and wireline carriers across the U.S. and a subset of these products and services to customers around the world.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Realty Income Increases Dividend for 112 Consecutive Quarters
- Stable Dividend Growth: Realty Income has increased its dividend for 112 consecutive quarters, demonstrating its ability to deliver stable growth across various macroeconomic environments, which is likely to continue attracting income-seeking investors.
- Strong Market Prospects: The company has a total addressable market of $8.5 trillion in Europe, indicating significant expansion potential, particularly with its investments in private capital that will further enhance its competitive position.
- UPS Cash Flow Assurance: United Parcel Service (UPS) expects to generate $6.5 billion in free cash flow in 2023, sufficient to cover $5.4 billion in dividends while also spending $3 billion on capital expenditures, showcasing its financial health and ability to maintain dividends.
- Verizon's Financial Improvement: Verizon Communications projects a 7% year-over-year increase in free cash flow to $21.5 billion in 2026, and with 19 consecutive years of dividend increases, it indicates strong growth potential following the acquisition of Frontier Communications.
See More
Analysis of High-Yield Stock Investment Strategies
- REIT Stability: Realty Income, the world's sixth-largest REIT, owns over 15,500 properties with top tenants like Dollar General and FedEx, boasting a forward dividend yield of 5.1%, and its impressive track record of 30 consecutive years of dividend increases underscores its stability and growth potential.
- Delivery Giant Resilience: United Parcel Service has never cut its dividend since going public in 1999, currently offering a 5.6% dividend yield, with projected free cash flow of $6.5 billion in 2023, sufficient to cover $5.4 billion in dividends, highlighting its strong financial health and growth prospects.
- Telecom Growth Potential: Verizon Communications offers a 6.1% dividend yield and has increased its dividend for 19 consecutive years, with free cash flow expected to rise to $21.5 billion in 2026, indicating robust growth following its acquisition of Frontier Communications, which strengthens its market position.
- Market Volatility and Investment Strategy: Despite increasing market volatility and concerns over a potential AI stock bubble, high-yield stocks like Realty Income, UPS, and Verizon present attractive options for investors, particularly in uncertain economic conditions due to their stability and growth potential.
See More
Dividend Stocks Gain Appeal Amid Tech Stock Meltdown
- Telecom Appeal: Verizon Communications (VZ) has achieved only 2% year-over-year growth in a highly competitive U.S. mobile market, yet its forward-looking dividend yield of 6.1% attracts income-seeking investors, highlighting the stock's stability and appeal amid market volatility.
- Pharmaceutical Strategy: Merck (MRK) is strategically preparing for the 2028 patent expiration of its Keytruda drug by acquiring companies like Prometheus Biosciences and Verona Pharma, expecting to generate $70 billion in new revenue by the mid-2030s, showcasing its market expansion capabilities.
- Beverage Stability: Coca-Cola (KO) offers a forward-looking dividend yield of 2.7% and boasts a 63-year history of dividend increases, demonstrating strong brand loyalty and marketing prowess, ensuring a reliable source of passive income for investors.
- Market Trend Shift: Amid the decline of tech stocks, investors are increasingly turning to blue-chip stocks, particularly high-dividend stocks within the Dow Jones Industrial Average, reflecting a preference for stable income and a reassessment of risk in the current market environment.
See More
Top Dow Jones Dividend Stocks to Buy for 2026
- Telecom Appeal: Verizon Communications (NYSE: VZ) operates in a highly competitive U.S. mobile market, with last year's revenue growth at only about 2%, yet its forward-looking dividend yield of 6.1% attracts income-seeking investors, demonstrating its defensive nature amid economic uncertainty.
- Pharmaceutical Strategy: Merck (NYSE: MRK) is making significant strides with strategic acquisitions like the $10.8 billion purchase of Prometheus Biosciences in 2023 and a $10 billion deal for Verona Pharma, expecting to drive $70 billion in new revenue by the mid-2030s, showcasing its long-term growth potential in cancer treatment.
- Beverage Stability: Coca-Cola (NYSE: KO) offers a forward-looking dividend yield of 2.7% and boasts 63 years of annual dividend increases, making it an ideal choice for investors seeking passive income, reflecting its strong brand loyalty and marketing prowess.
- Investor Focus: While Verizon did not make the Motley Fool's list of top stocks, its stable dividend and market position still make it a focal point for conservative investors, highlighting a preference for blue-chip stocks amid market volatility.
See More
Saturated Telecom Market Limits Verizon's Growth Potential
- Telecom Market Saturation: The U.S. mobile phone market is highly saturated, with Verizon Communications (NYSE: VZ) reporting only 2% year-over-year revenue growth last quarter, indicating limited net growth potential, although its forward-looking dividend yield of 6.1% remains attractive.
- Pharmaceutical Positioning: Pharmaceutical giant Merck (NYSE: MRK) is preparing for the 2028 patent expiration of Keytruda, having made significant acquisitions like the $10.8 billion purchase of Prometheus Biosciences in 2023, expecting these moves to drive $70 billion in new revenue by the mid-2030s.
- Coca-Cola's Steady Income: Coca-Cola (NYSE: KO) offers a forward-looking dividend yield of 2.7%, backed by 63 years of annual dividend increases, showcasing its strong brand loyalty and marketing prowess, solidifying its status as a top dividend payer.
- Investor Considerations: While Verizon is seen as a stable dividend stock, the Motley Fool analyst team has identified 10 stocks that are currently viewed as more valuable investments, potentially yielding significant returns in the coming years, prompting investors to choose wisely.
See More
Benzinga Stock Whisper Index for the Week Ending February 6
- Investor Focus: Benzinga's Stock Whisper Index utilizes proprietary data and pattern recognition each week to highlight five undervalued stocks that deserve attention, assisting investors in finding new opportunities amidst information overload.
- Market Dynamics: While retail traders face challenges with numerous methods available, the index aims to reveal overlooked stocks by filtering information, thereby enhancing investors' decision-making capabilities.
- Data Source: Benzinga Pro provides the latest market dynamics and headlines, ensuring investors can access key information that impacts the market, thereby improving the effectiveness of their investment strategies.
- Ongoing Attention: Benzinga encourages investors to stay tuned for next week's report and to follow Benzinga Pro for the latest market-moving stories, ensuring they do not miss potential investment opportunities.
See More
Realty Income Increases Dividend for 112 Consecutive Quarters
- Stable Dividend Growth: Realty Income has increased its dividend for 112 consecutive quarters, demonstrating its ability to deliver stable growth across various macroeconomic environments, which is likely to continue attracting income-seeking investors.
- Strong Market Prospects: The company has a total addressable market of $8.5 trillion in Europe, indicating significant expansion potential, particularly with its investments in private capital that will further enhance its competitive position.
- UPS Cash Flow Assurance: United Parcel Service (UPS) expects to generate $6.5 billion in free cash flow in 2023, sufficient to cover $5.4 billion in dividends while also spending $3 billion on capital expenditures, showcasing its financial health and ability to maintain dividends.
- Verizon's Financial Improvement: Verizon Communications projects a 7% year-over-year increase in free cash flow to $21.5 billion in 2026, and with 19 consecutive years of dividend increases, it indicates strong growth potential following the acquisition of Frontier Communications.
See More
Analysis of High-Yield Stock Investment Strategies
- REIT Stability: Realty Income, the world's sixth-largest REIT, owns over 15,500 properties with top tenants like Dollar General and FedEx, boasting a forward dividend yield of 5.1%, and its impressive track record of 30 consecutive years of dividend increases underscores its stability and growth potential.
- Delivery Giant Resilience: United Parcel Service has never cut its dividend since going public in 1999, currently offering a 5.6% dividend yield, with projected free cash flow of $6.5 billion in 2023, sufficient to cover $5.4 billion in dividends, highlighting its strong financial health and growth prospects.
- Telecom Growth Potential: Verizon Communications offers a 6.1% dividend yield and has increased its dividend for 19 consecutive years, with free cash flow expected to rise to $21.5 billion in 2026, indicating robust growth following its acquisition of Frontier Communications, which strengthens its market position.
- Market Volatility and Investment Strategy: Despite increasing market volatility and concerns over a potential AI stock bubble, high-yield stocks like Realty Income, UPS, and Verizon present attractive options for investors, particularly in uncertain economic conditions due to their stability and growth potential.
See More
Dividend Stocks Gain Appeal Amid Tech Stock Meltdown
- Telecom Appeal: Verizon Communications (VZ) has achieved only 2% year-over-year growth in a highly competitive U.S. mobile market, yet its forward-looking dividend yield of 6.1% attracts income-seeking investors, highlighting the stock's stability and appeal amid market volatility.
- Pharmaceutical Strategy: Merck (MRK) is strategically preparing for the 2028 patent expiration of its Keytruda drug by acquiring companies like Prometheus Biosciences and Verona Pharma, expecting to generate $70 billion in new revenue by the mid-2030s, showcasing its market expansion capabilities.
- Beverage Stability: Coca-Cola (KO) offers a forward-looking dividend yield of 2.7% and boasts a 63-year history of dividend increases, demonstrating strong brand loyalty and marketing prowess, ensuring a reliable source of passive income for investors.
- Market Trend Shift: Amid the decline of tech stocks, investors are increasingly turning to blue-chip stocks, particularly high-dividend stocks within the Dow Jones Industrial Average, reflecting a preference for stable income and a reassessment of risk in the current market environment.
See More
Top Dow Jones Dividend Stocks to Buy for 2026
- Telecom Appeal: Verizon Communications (NYSE: VZ) operates in a highly competitive U.S. mobile market, with last year's revenue growth at only about 2%, yet its forward-looking dividend yield of 6.1% attracts income-seeking investors, demonstrating its defensive nature amid economic uncertainty.
- Pharmaceutical Strategy: Merck (NYSE: MRK) is making significant strides with strategic acquisitions like the $10.8 billion purchase of Prometheus Biosciences in 2023 and a $10 billion deal for Verona Pharma, expecting to drive $70 billion in new revenue by the mid-2030s, showcasing its long-term growth potential in cancer treatment.
- Beverage Stability: Coca-Cola (NYSE: KO) offers a forward-looking dividend yield of 2.7% and boasts 63 years of annual dividend increases, making it an ideal choice for investors seeking passive income, reflecting its strong brand loyalty and marketing prowess.
- Investor Focus: While Verizon did not make the Motley Fool's list of top stocks, its stable dividend and market position still make it a focal point for conservative investors, highlighting a preference for blue-chip stocks amid market volatility.
See More
Saturated Telecom Market Limits Verizon's Growth Potential
- Telecom Market Saturation: The U.S. mobile phone market is highly saturated, with Verizon Communications (NYSE: VZ) reporting only 2% year-over-year revenue growth last quarter, indicating limited net growth potential, although its forward-looking dividend yield of 6.1% remains attractive.
- Pharmaceutical Positioning: Pharmaceutical giant Merck (NYSE: MRK) is preparing for the 2028 patent expiration of Keytruda, having made significant acquisitions like the $10.8 billion purchase of Prometheus Biosciences in 2023, expecting these moves to drive $70 billion in new revenue by the mid-2030s.
- Coca-Cola's Steady Income: Coca-Cola (NYSE: KO) offers a forward-looking dividend yield of 2.7%, backed by 63 years of annual dividend increases, showcasing its strong brand loyalty and marketing prowess, solidifying its status as a top dividend payer.
- Investor Considerations: While Verizon is seen as a stable dividend stock, the Motley Fool analyst team has identified 10 stocks that are currently viewed as more valuable investments, potentially yielding significant returns in the coming years, prompting investors to choose wisely.
See More
Benzinga Stock Whisper Index for the Week Ending February 6
- Investor Focus: Benzinga's Stock Whisper Index utilizes proprietary data and pattern recognition each week to highlight five undervalued stocks that deserve attention, assisting investors in finding new opportunities amidst information overload.
- Market Dynamics: While retail traders face challenges with numerous methods available, the index aims to reveal overlooked stocks by filtering information, thereby enhancing investors' decision-making capabilities.
- Data Source: Benzinga Pro provides the latest market dynamics and headlines, ensuring investors can access key information that impacts the market, thereby improving the effectiveness of their investment strategies.
- Ongoing Attention: Benzinga encourages investors to stay tuned for next week's report and to follow Benzinga Pro for the latest market-moving stories, ensuring they do not miss potential investment opportunities.
See More
