High-Yield Stocks That Could Wreck Your Retirement: Verizon (VZ)
Dividend Yield: 4.7%
Up next is mobile phone, internet and paid TV provider Verizon Communications Inc. (NYSE:VZ).
Telecom stocks have been popular high-yield choices among retirees forever. The stable, recession-resistant businesses, near monopoly power and high dividend yields made them obvious choices.
But consumers have more flexibility to change providers than ever before, internet and mobile phone service are completely saturated in all developed countries, and, at the end of the day, the services being offered have long since been commoditized. Few consumers are willing to pay for “premium” mobile or internet service these days. Price is pretty much all that matters.
And paid TV? Well, it effectively priced itself out of competition. Cable TV inflation rivals that of medicine or college tuition at a time when American family incomes aren’t growing. It’s not surprising that nearly 2% of Americans cut the cord every year.
I don’t think VZ will be going out of business any time soon. And for now, Verizon’s 4.8% dividend would seem to be safe. But as a general rule, I wouldn’t want the safety of my retirement to hinge on a stock in an industry facing major disruption.