Verizon just reported its third-quarter results. As always, the finance news is reporting whether or not Verizon stock beat estimates. If that’s the kind of quick news you need to see, then yes, Verizon stock beat estimates for earnings, but revenue was slightly under estimates.
Now that we’ve gotten the skin deep financial analysis out of the way, let’s dig in and see if Verizon stock will help us achieve financial independence.
Verizon Stock Analysis
I’ve owned Verizon stock forever. It pays a solid dividend and as an enormous telecommunications it isn’t going away without a big warning, so it fits perfectly in my non-retirement stock portfolio as a bond-stock, or value stock, if you prefer.
Thanks to those decent earnings, Verizon stock is rising today, but it’s still down for the year, and year-to-date. As of yesterday’s close, the 12-month dividend yield stood at almost 5%, at 4.89%. You can’t get an interest rate like that anywhere today. So, if you’re willing to hold Verizon stock as a dividend paying bond-like investment for a few years, chances are good that you can at least get your principal (cost basis) back. And, if Verizon happens to have a good few years, then you could even earn some capital gains while Verizon pays you 4.5% to wait.
Verizon management increase their profit and revenue guidance higher for the full 2021 year, which means they are expecting a pretty solid fourth-quarter. Still, I wouldn’t be getting into Verizon stock for short-term capital gains. Verizon stock is a buy for holding on to in order to collect a 4%+ dividend on with little risk of default. However, there is a solid chance that Verizon won’t be trading higher in a few months, or even over the next year.
If you’re gonna buy Verizon, do it for the dividend and look at collecting it for the next three to five years while the company’s stock price drifts slowly higher. If you’re looking for a quick, or even 12-month play, I wouldn’t recommend Verizon stock.
By Brian Nelson – Brian is a former Certified Financial Planner and financial advisor. He writes for the Finance Gourmet and other financial publications. The material provided on this website is for informational use only and is not intended for financial or investment advice. At the time of publication, Mr. Nelson owned shares of Verizon stock, however, that may change at any time without notice. ArcticLlama, LLC, FinanceGourmet.com, and Brian Nelson, assume no liability for any loss or damage resulting from one’s reliance on the material provided. Please also note that such material is not updated regularly and that some of the information may not therefore be current. Consult with your own financial professional when making decisions regarding your financial or investment options.