Verizon's Turnaround Is Gaining Momentum. Is This 6.5%-Yielding Dividend Stock a Buy?
2026-10-26 20:00
•Matt Dilallo •The Motley Fool
•••••••• •••••• Axe Cap view
Verizon’s Growth Spurs Dividend Appeal
Verizon’s strong customer gains and AI partnerships make it a tempting dividend stock despite competitive risks.
Verizon reported impressive Q3 results, adding over 400,000 postpaid customers—a rare acceleration in this mature US telecom market. Their partnerships with Amazon and Google to build AI infrastructure is an interesting growth angle that could help offset a saturated domestic market. Trading at just 8.5 times earnings with a hefty 6.5% dividend yield, Verizon looks cheap for an established telco. South African investors should watch USD/ZAR closely; should the rand weaken, US dollar income from the dividend becomes even more attractive. However, the telecom space is fiercely competitive, and emerging players like SpaceX’s Starlink could pressure margins and customer retention. While the pick is appealing, it requires a tolerance for sector disruption. this is just our opinion and not financial advice
For local investors with exposure to USD assets, this is a buy for dividend income and modest growth, especially if the rand remains stable or weakens. Trim or avoid if SpaceX makes big inroads in US markets or if USD/ZAR strengthens sharply.
- VZ
- USD/ZAR
- Rising US telecom competition, especially SpaceX
- Strong USD causing rand weakness affecting local portfolio volatility
6/10
Verizon is experiencing accelerating growth with strong Q3 results, adding 406,000 postpaid phone customers (820% YoY increase) and raising full-year guidance for the third consecutive quarter. Trading at 8.5x earnings with a 6.5% dividend yield, the stock appears undervalued. New AI infrastructure partnerships with Amazon and Google provide additional growth drivers. The analyst rates it a buy, projecting roughly 10% annualized returns, though risks include potential competition from SpaceX.
Our take is based on reporting first published by The Motley Fool.