Tuesday, September 8, 2015

Stock Report: Verizon (VZ)

Verizon is an interesting dividend company. They have a great track record of growing dividends. They grow slowly but steadily. They've made it through several bad years without missing or stopping growth. Verizon operates mainly subscription based services. I believe subscriptions are a good model, because people tend to stick with them more than one-off purchases, even when times get tough. For example, people on a budget are more likely to keep their mobile phone plan, and will skip going out to dinner to save money. And they'll still watch FiOS TV or use their internet at home. There is heavy competition though, including from themselves. Many people are using their phones for everything, and no longer feel they need TV packages and are cutting the cord. Cutting their home internet isn't far behind if they live in an area with good cell service and speeds. What remains is a mobile data plan, which is a commodity and under heavy competition. Verizon is investing in other types of businesses, including their Hum service for cars, and Go90 for mobile videos.

Verizon has been growing dividends for a good while and at a very manageable pace. They just raised their payout for their upcoming cycle in November. I think there are other companies with better dividend growth and that are on sale right now. Still, keep Verizon in mind for further research. I believe they'll be going to be a good dividend payer for some time to come.

I have a large position in VZ, about 10% of my portfolio. For that reason I do not plan to add to Verizon. I plan to hold on to Verizon as long as they keep paying and growing dividends.

Disclaimer: I own Verizon stock for my dividend portfolio. After my purchase, the company I work for became a wholly owned subsidiary of Verizon. 

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