Is Verizon's 6.2%-Yielding Dividend Still Safe After This Announcement?

Core Viewpoint - Verizon Communications offers a high dividend yield of around 6.2%, but concerns about the sustainability of this yield have arisen due to recent performance warnings and competitive pressures [1][2]. Financial Performance - Verizon's share prices have decreased by 17% over the past three years, indicating a lack of excitement in the business [2]. - For 2025, Verizon projects wireless service revenue growth between 2% and 2.8%, following a disappointing 2024 where revenue was $134.8 billion, rising by less than 1% [4]. - The company currently pays approximately $2.8 billion quarterly in dividends, totaling around $11.4 billion annually [7]. Dividend Sustainability - The payout ratio stands at 64%, providing a buffer against potential earnings pressure [6]. - Verizon's projected free cash flow for 2025 is between $17.5 billion and $18.5 billion, significantly exceeding its dividend obligations [7]. Market Position - Despite recent warnings affecting stock performance, Verizon's share price has increased by about 9% this year, closing at $43.65, above its 52-week low of $37.59 [8]. - The stock is trading at less than 11 times its trailing earnings, suggesting it may be an undervalued investment opportunity [9].