Current Dividend Yield: 4.7%
Performance So Far in 2012: +17%
Verizon (NYSE:VZ) has been labeled a sleepy telecom stock. Except that since this spring, VZ shares popped significantly thanks to decent earnings numbers as well as a massive demand for yield on Wall Street.
Big-picture, Verizon is one of the most secure plays out there. It remains the leading wireless telecom provider in the U.S. by subscriptions and gets 50% of its revenue from wireless subscribers. The company also is one of the top high-speed Internet providers in America via its FiOS fiber optic network. As the world becomes increasingly wired, it’s more important than ever for companies like Verizon to be involved with the operations of businesses and the lives of regular Americans.
This provides a very stable revenue stream that accounts for huge dividends. Like many low-risk dividend stocks, this is a double-edged sword because there might not be any huge growth opportunities for the entrenched telecom. But strong cash flow generation and the lack of any real competition from anyone other than AT&T (NYSE:T) means this telecom stock is a stalwart that’s here to stay.
There is a catch: As InvestorPlace Assistant editor Marc Bastow said in a recent VZ writeup that was bullish on the stock, Verizon currently pays out more in dividends than it makes in net income — and it just raised its dividend further! But predictions of solid if not enormous future growth should mean those dividends keep flowing nicely.