Should You Buy This Nearly 7%-Yielding Dow Jones Stock for Dividend Income?

Core Viewpoint - Verizon stands out in the Dow Jones Industrial Average with a nearly 7% dividend yield, significantly higher than the average of 1.7% among the 30 stocks in the index, indicating potential concerns regarding its financial health and future dividend sustainability [1][3]. Financial Analysis - Verizon reported third-quarter revenue of $33.8 billion, reflecting a 1.5% year-over-year increase, with adjusted earnings rising 1.7% to $1.21 per share [3]. - The company generated $28 billion in cash flow from operations year-to-date, a nearly 6% increase compared to the previous year, and produced $15.8 billion in free cash flow after $12.3 billion in capital expenditures, which is sufficient to cover its $8.6 billion in dividend payments [4]. - Verizon's leverage ratio improved from 2.5 times last year to 2.2 times, aligning with its target range ahead of a planned $20 billion acquisition of Frontier Communications, supporting its investment-grade bond ratings [5][6]. Future Outlook - Despite decent financial results, Verizon is dissatisfied with its performance and has appointed Dan Schulman as CEO to drive growth, emphasizing a transformative approach rather than incremental changes [7]. - The new CEO plans to focus on aggressive cultural and financial transformation, enhancing customer experience through significant marketing investments funded by cost-cutting measures, and leveraging AI technology [8].