When investors consider buying high-quality stocks, the term ‘blue chip’ often comes to mind.
There is no official definition of what constitutes a blue chip. Our definition of a ‘blue chip’ stock, is a company that has satisfied two criteria.
First, the company in question has an operating history of over 100 years. Second, it pays a dividend, with a current dividend yield of at least 3%.
A company with these two qualities possesses a strong brand, durable competitive advantages, and demonstrates a commitment to shareholders.
Verizon Communications (VZ) is a blue-chip stock. The company dates all the way back to the late 19th century, to The Bell Telephone Company.
It has an attractive dividend yield of 5.3%. It is one of 405 stocks with a 5%+ dividend yield. You can see the full list of established 5%+ yielding stocks here.
And, Verizon has increased its dividend for 10 years in a row, making it a Dividend Achiever, which have raised their dividends for 10+ consecutive years.
This article will discuss what makes Verizon a blue-chip dividend stock.
Business Overview
Verizon, in its current form, was created on June 30th, 2000, when Bell Atlantic and GTE Corp. came together in one of the largest mergers in U.S. history.
Today, Verizon is a major U.S. telecommunications company. Its prized asset is Verizon Wireless, the largest wireless carrier in the U.S.
Verizon’s adjusted earnings-per-share, which excludes non-recurring items, fell 3% in 2016, to $3.87, due to a 4.3% decline in revenue.
Still, Verizon remains highly profitable.
The company’s huge profits are the result of its high-quality network. Due to massive investments in its technology infrastructure, Verizon boasts an industry-leading network
Source: May Analyst Meeting, page 11
Unfortunately, conditions did not improve for Verizon to start 2017. First-quarter revenue declined 7% from the same quarter last year, and missed analyst expectations.
