Buying Verizon Stock for Its Dividend? Read This First. [telecom]

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Bill Horne

Nov 23, 2022, 7:41:41 PM11/23/22
By Keithen Drury

Verizon's dividend yield looks too good to be true. Is it?

Dividends are an attractive proposition for owning a stock. After all,
it's nice to get paid only for owning something. When looking at high
dividend-yielding stocks, three sectors often come up: utilities, real
estate investment trusts (REITs), and telecoms. These businesses
usually have very consistent cash flows, allowing them to pay a
higher-than-average dividend to shareholders.

Among the telecoms is Verizon Communications (VZ -0.71%), the
second-largest provider behind AT&T. The stock sports an attractive
6.89% dividend yield, which also places it in red-flag
territory. Often, when a stock's dividend yield rises higher than 5%,
it's seen as a warning sign that the company won't be able to pay its
dividend obligations sustainably.

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