Core Insights - Investors are focusing on dividend stocks for regular income amid market volatility [1][2] Group 1: EOG Resources - EOG Resources announced the acquisition of Encino Acquisition Partners for $5.6 billion, leading to a 5% increase in its quarterly dividend to $1.02 per share, with an annualized dividend of $4.08, resulting in a dividend yield of 3.4% [3][4] - Analyst Gabriele Sorbara maintains a buy rating on EOG with a price target of $155, expecting strong quarterly results and significant expansion in the Utica shale due to the acquisition [4][5] - EOG is projected to return at least 70% of its free cash flow to shareholders annually, with an estimated $976.6 million in capital returns, representing 107.7% of free cash flow and a 6.0% capital returns yield [6] Group 2: Williams Companies - Williams Companies offers a quarterly dividend of $0.50 per share, with an annualized dividend of $2.00, reflecting a yield of 3.5% [8] - Analyst Elvira Scotto reaffirmed a buy rating on WMB with a price target of $63, while adjusting Q2 projections due to seasonal factors and commodity price changes [9][11] - Scotto is optimistic about WMB's long-term growth potential, supported by a robust backlog of projects and expected benefits from additional projects and pipeline revivals [12][13] Group 3: Verizon Communications - Verizon Communications reported solid Q2 results, raising its annual profit guidance and announcing a quarterly dividend of $0.6775 per share, with an annualized dividend of $2.71, resulting in a dividend yield of 6.3% [14][15] - Analyst Michael Rollins reiterated a buy rating on Verizon with a price target of $48, noting the company's strong performance and upgraded full-year guidance [15][16] - Despite mixed key performance indicators and increased promotional costs, Rollins believes Verizon is well-positioned to meet its full-year guidance and sustain financial growth [16][17]

Core Viewpoint - Verizon Communications has shown improvement in its stock performance following solid second quarter results and positive guidance, with a year-to-date stock price increase of approximately 7% and a yield exceeding 6% [1] Financial Performance - Verizon's Q2 revenue increased by 5.2% to $34.5 billion, surpassing analyst expectations of $33.74 billion [6] - Wireless service revenue rose by 2.2% to $20.9 billion, while wireless equipment revenue surged by 25.2% to $6.3 billion [6] - Adjusted earnings per share (EPS) climbed 6% to $1.22, and adjusted EBITDA rose 4.1% to $12.8 billion [6] Subscriber Growth - The broadband business led growth, adding 293,000 net broadband subscribers, totaling 12.9 million, a year-over-year increase of over 12% [3] - The consumer wireless segment lost 51,000 postpaid subscribers but gained 50,000 prepaid subscribers [4] - Business service revenue increased by 1.6% to $3.6 billion, with 65,000 wireless retail postpaid net additions [5] Future Guidance - Verizon maintained its full-year 2025 wireless revenue growth forecast of 2% to 2.8% and increased the low end of its adjusted EPS growth forecast to 1% to 3% [7] - The company raised its operating cash flow outlook to between $37 billion and $39 billion, leading to a projected free cash flow of $19.5 billion to $20.5 billion [8][9] Dividend and Cash Flow - Verizon's dividend yield is approximately 6.4%, with a coverage ratio of 1.5x based on $8.8 billion in free cash flow generated in the first half of the year against $5.7 billion in dividends paid [10] - The company benefits from new tax legislation allowing for immediate 100% depreciation of certain assets, enhancing cash flow [11] Strategic Acquisitions - Verizon's acquisition of Frontier Communications is expected to significantly expand its fiber network, particularly in states like Florida, Texas, and California, enhancing its ability to bundle mobile and home internet services [14][15] Valuation - Verizon trades at a forward price-to-earnings (P/E) ratio of 9x based on 2025 earnings estimates, which is below AT&T's 13x multiple, indicating potential upside [16]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark one) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number: 1-8606 Verizon Communications Inc. (Exact name of registrant as specified in its charter) Delaware 23-2259884 (State ...

Core Viewpoint - Verizon Communications reported solid earnings for Q2 2025, with rising revenue, earnings, and free cash flow, but concerns remain regarding its high debt levels, indicating potential struggles ahead without significant changes [1][12]. Financial Performance - Verizon's total debt reached nearly $146 billion by mid-2025, an increase from $144 billion at the end of the previous year, with unsecured debt rising by $2 billion [3]. - The company's total equity or book value stands at $104 billion, highlighting the strain of its debt obligations on the balance sheet [3]. - Over the past 12 months, Verizon incurred $6.6 billion in interest expenses, translating to slightly over 4% interest costs relative to its total debt of $154 billion, which is considered relatively low [5]. Debt and Interest Rates - Interest rates have increased since 2021, and while only about $2 billion of Verizon's debt is due this year, refinancing at higher rates is anticipated, potentially increasing future costs [6]. - The company has historically relied on debt to finance its telecom network, with a significant acquisition of C-band spectrum costing $52.9 billion in 2021 [4]. Dividend Sustainability - Verizon has maintained an 18-year streak of dividend increases, with a current dividend yield of 6.4%, significantly higher than the S&P 500 average of 1.2% and its competitors AT&T (4.1%) and T-Mobile (1.4%) [8]. - The dividend cost Verizon approximately $11.4 billion over the last year, which it can cover with its free cash flow of just over $20.1 billion, but a dividend cut could allow for debt reduction [9][10]. Market Position and Future Outlook - Despite the attractive dividend, the high cost and heavy debt burden may render the current dividend trajectory unsustainable, leading to potential struggles if a cut occurs [12]. - The low P/E ratio of 10 suggests limited downside risk, and improved financials could attract investors in the long run if the company focuses on reducing its debt [10][11]. - Comparisons with AT&T indicate that even after a dividend cut, a solid financial position could make Verizon stock appealing if it successfully manages its debt [13].

Group 1 - Verizon Communications reported better-than-expected second-quarter results and raised its full-year guidance, marking its 35th consecutive year of being recognized for the best wireless network quality by J.D. Power [1] - The company's forward price-to-earnings ratio is below 9.2, significantly lower than the S&P 500's forward earnings multiple of 22.7, indicating that Verizon's shares are not priced for perfection [8] - Verizon's business is largely resistant to the impact of tariffs and overall economic downturns, as wireless services are considered essential by consumers [10] Group 2 - The company is on track to close the acquisition of Frontier Communications in early 2026, which is expected to boost growth [12] - Verizon's forward dividend yield is 6.3%, providing a strong foundation for delivering double-digit percentage total returns, supported by an increase in free cash flow expected this year [13]

Market Overview - The market capitalization of major US stocks shows varied performance, with Oracle at 762.30 billion, Mastercard at 321.36 billion, and Visa at 770.15 billion, reflecting increases of +0.66%, +0.86%, and +0.68% respectively [3] - Exxon Mobil's market cap is 679.53 billion, with a slight decrease of -0.98%, while Johnson & Johnson and Netflix show minor changes of -0.08% and -0.05% respectively [3] - Companies like Wells Fargo and Cisco have market caps of 270.15 billion and 279.59 billion, with respective increases of +0.98% and -0.58% [3] Notable Stock Movements - T-Mobile US Inc experienced a significant increase of +6.20%, reaching a market cap of 272.19 billion [3] - General Electric and Coca-Cola saw market caps of 285.05 billion and 298.76 billion, with increases of +0.37% and +0.91% respectively [3] - Companies like Disney and Goldman Sachs have market caps of 229.06 billion and 221.80 billion, with slight changes of +0.01% and -0.60% [3] Sector Performance - The technology sector shows mixed results, with Intel at 991.05 billion, down -3.28%, while AMD increased by +2.46% to 254.92 billion [5] - The consumer goods sector is represented by companies like Procter & Gamble and Coca-Cola, with market caps of 371.68 billion and 298.76 billion, showing slight increases [3][4] - The energy sector, represented by Exxon Mobil and Chevron, shows varied performance, with Exxon down -0.98% and Chevron up +0.66% [3] Summary of Key Companies - Oracle's market cap stands at 762.30 billion, reflecting a positive trend [3] - Mastercard and Visa show strong performance with market caps of 321.36 billion and 770.15 billion, both increasing [3] - Companies like Pfizer and Comcast have market caps of 1579.81 billion and 1332.00 billion, with Pfizer showing minimal change and Comcast down -3.16% [4][5]

Group 1: Bond Market Outlook - The yield on the 10-year treasury is expected to remain in the low-to-mid 4% range in 2025, with the FOMC on track to reduce interest rates by approximately 2% over time, suggesting a similar decline in bond yields [1] Group 2: High-Yield Stocks - Mid-2025 is identified as an opportune time to invest in high-yield stocks, with companies like Verizon, Stanley Black & Decker, J.M. Smucker, and PepsiCo trading near historically low valuations and offering yields of at least 4% [2] - Verizon's dividend yield is projected to be 6.5% in mid-2025, supported by a mid-single-digit equity gain and a modest single-digit growth pace expected in 2025 [4][5] - Stanley Black & Decker's shares have hit a decade low, presenting a generational buying opportunity, with a dividend yield of 4.42% and a strong dividend increase track record of 58 years [7] - J.M. Smucker Company has a dividend yield of 3.96%, with a solid balance sheet and a share price expected to rebound strongly in the latter half of the year [10][12] - PepsiCo's dividend yield is substantial at 3.91%, with a diversified growth strategy that has allowed it to maintain a healthy balance sheet while covering capital returns [14][16]

Core Insights - The First Trust Morningstar Dividend Leaders ETF (FDL) is designed to provide broad exposure to the Large Cap Value segment of the US equity market, with assets exceeding $5.65 billion, making it one of the larger ETFs in this category [1] Group 1: Large Cap Value Overview - Large cap companies typically have a market capitalization above $10 billion, offering a stable investment option with lower risk and more reliable cash flows compared to mid and small cap companies [2] - Value stocks are characterized by lower than average price-to-earnings and price-to-book ratios, as well as lower sales and earnings growth rates. Historically, value stocks have outperformed growth stocks in nearly all markets, although growth stocks tend to perform better in strong bull markets [3] Group 2: Costs and Performance - The ETF has an annual operating expense ratio of 0.43%, which is competitive within its peer group, and a 12-month trailing dividend yield of 4.58% [4] - FDL aims to match the performance of the Morningstar Dividend Leaders Index, which includes stocks with consistent and sustainable dividends. The ETF has gained approximately 10.15% year-to-date and 15.34% over the past year, with a trading range of $38.19 to $43.95 in the last 52 weeks [7] Group 3: Sector Exposure and Holdings - The ETF has a significant allocation to the Energy sector, comprising about 25.30% of the portfolio, followed by Healthcare and Consumer Staples [5] - Exxon Mobil Corporation (XOM) represents approximately 10.20% of total assets, with the top 10 holdings accounting for about 55.23% of total assets under management [6] Group 4: Risk and Alternatives - FDL has a beta of 0.72 and a standard deviation of 15.02% over the trailing three-year period, indicating a medium risk profile. The ETF holds about 101 stocks, effectively diversifying company-specific risk [8] - Alternatives to FDL include the Schwab U.S. Dividend Equity ETF (SCHD) and the Vanguard Value ETF (VTV), which track similar indices but have larger asset bases and lower expense ratios of 0.06% and 0.04%, respectively [10] Group 5: Market Trends - Passively managed ETFs are gaining popularity among both institutional and retail investors due to their low cost, transparency, flexibility, and tax efficiency, making them suitable for long-term investment strategies [11]

Core Insights - Investors are encouraged by recent earnings reports from Verizon and American Express, with Verizon raising earnings guidance for the latter half of 2025 and American Express achieving record second-quarter revenue [1][2] Group 1: Verizon - Verizon has raised its dividend payout for 18 consecutive years, currently offering a 6.3% dividend yield, although the quarterly payment has only increased by 19.9% over the past decade [4][6] - The wireless service revenue grew by 2.2% year-over-year, while broadband connections increased by 12.2% to 12.9 million [5] - Free cash flow is projected to reach $4.74 per share in 2025, sufficient to cover the current annual dividend obligation of $2.71 [6] Group 2: American Express - American Express has a lower dividend yield of 1.1% but has increased its payout by 17% earlier this year, with a total increase of 183% over the past decade [7][8] - The company has reduced its share count by 29.4% over the last ten years, facilitating easier management of future payout increases [8] - American Express is positioned to benefit from steady growth as one of four global credit card networks, with recent initiatives like the Coinbase One Card enhancing its competitive stance [10][11] Group 3: Investment Considerations - The choice between Verizon and American Express depends on the investor's time horizon; American Express offers strong historical growth but a low current yield, while Verizon provides a higher yield with slower growth [12][13] - Projecting future yields, American Express could yield around 3.6% by 2045, while Verizon could yield 9.1% by the same year, making Verizon potentially more attractive for income-seeking investors [12][14]

Core Viewpoint - Verizon is facing threats of legal action and a potential smear campaign from Byron Allen, a media mogul, after the company reduced its advertising budget with his media group, Allen Media Group (AMG) [1][5][10]. Group 1: Legal Threats and Advertising Budget - Byron Allen has threatened to sue Verizon for alleged racial discrimination after the company backed out of a $15 million annual advertising deal with AMG [1][10]. - Verizon claims that the threats from Allen and AMG are baseless and represent an attempted shakedown [4][5]. - The company plans to reduce its advertising spending with AMG by 30% in 2025 and 2026, bringing the budget down to $5 million from $15 million [10][11]. Group 2: Historical Context and Partnerships - Verizon and AMG previously collaborated on a diversity, equity, and inclusion initiative aimed at increasing media spending in Black-owned media companies [12][13]. - Allen has a history of suing major media companies for racial discrimination, having recently settled a $10 billion lawsuit against McDonald's [16][18]. - The political climate has shifted, impacting DEI programs, as seen in Verizon's agreement to end its DEI initiatives during its merger with Frontier Communications [15].