Verizon Communications (VZ) Stock

Similar to many other companies, Verizon Communications is exploring ways to effectively use artificial intelligence (AI). The telecom leader is already applying this technology to improve customer service and increase efficiency in its operations.

CHARLOTTE, N.C., Jan. 31, 2025 (GLOBE NEWSWIRE) -- Verizon is partnering with ForgiveCo to help erase $10 million in consumer debt for 6,500 residents in Western North Carolina. This debt relief initiative is part of Verizon's continued efforts to support recovery after the significant damage caused by Hurricane Helene.

Verizon (VZ -0.30%) stock isn't very popular with Wall Street, yet the company consistently generates cash every quarter. In this video, Travis Hoium discusses how the dividend could be a strong reason to invest in the stock.

Investors may find Verizon appealing due to its stable and relatively high yield, with no immediate concerns about cuts. In its Q4 FY2024 report, Verizon showed its best quarterly results in over a decade, gaining nearly one million new postpaid mobile and broadband customers. I believe the planned investments will boost customer growth and enhance its market presence even more.

Verizon has performed well, showing growth in its consumer postpaid and broadband areas. This improvement has led to better profits and a stronger financial position, especially as we move past the peak spending on 5G. For these reasons, we think Verizon's stock is undervalued right now, offering good potential for capital gains and higher future dividend yields.

Verizon has seen significant growth in its broadband subscribers and free cash flow, which helps support its dividends and investment opportunities. In the fourth quarter of 2024, the company exceeded revenue expectations and met earnings per share targets, adding 408,000 new broadband customers and generating a strong free cash flow of $5.4 billion. With a low valuation of 8.1 times forward earnings and a 12% earnings yield, Verizon offers a good risk profile for investors.

The market is feeling cautiously positive after Verizon announced its Q4 2024 earnings last week. While I still recommend buying, I have some concerns about certain operational challenges. Investors appreciated the efforts to reduce debt, but more improvements are necessary in 2025.

After facing challenges for several years, Verizon's efforts are starting to show positive results and benefit its shareholders. The company's focus on creating the largest 5G network in North America is leading to more market share, better customer reach, and higher satisfaction, which supports its ongoing growth.

Verizon (VZ 0.92%) offers a very high dividend. With a yield of 6.8%, it ranks among the top 10 dividend stocks in the S&P 500.