Telecom giant Verizon (VZ) certainly delivers the goods in yield at 4.4%. But it hasn’t really done much in the past few years to juice its healthy payout further.
During the past five years, VZ has only upped his payout from 46 cents to 52 cents — good for a woeful average of 3% annually.
To put it bluntly, that’s pathetic. Verizon has generated an average of more than $31 billion in operating cash flow during the same period, and held anywhere between $3 billion and $13 billion in the bank depending on the year. Of course, the problem is net income — over the past few years, it has been trending down, from nearly $5 billion in 2009 to just $875 million (primarily due to pension charges) last year.
Verizon’s no terrible holding — and I actually own, though it’s just an old vestige from an investment in AT&T (T) way back in the 1980s — but dividend growth certainly isn’t at the same level as Wall Street’s adoration.