The 6% Yielder Heading Into Q2 Earnings With Room to Run

Growth Picks (Sponsored)

5 Stocks Showing Early Growth Signals

Many investors are seeing solid gains in today’s market, but solid gains often hide opportunities with far greater potential.

A new analysis highlights the 5 Stocks Set to Double, selected from thousands of companies showing early signs of powerful growth.

These picks feature strong fundamentals and technical indicators that often appear before meaningful upside.

Past editions of this research uncovered gains of +175%, +498%, and +673%.

Download the 5 Stocks Set to Double. Free Today.

*This free resource is being sent by Zacks. We identify investment resources you may choose to use in making your own decisions. Use of this resource is subject to the Zacks Terms of Service.
*Past performance is no guarantee of future results. Investing involves risk. This material does not constitute investment, legal, accounting, or tax advice. Zacks Investment Research is not a licensed dealer, broker, or investment adviser.

Telecom

Meet the Wireless Giant Getting Left for Dead

Verizon Communications (NYSE: VZ) is the wireless and broadband heavyweight carrying roughly $180 billion in market cap and one of the fattest yields in the large-cap dividend universe. The company runs the largest US wireless network by revenue, serves roughly 145 million wireless connections, and increasingly leans on fixed wireless access, fiber, and enterprise services for growth.

Boring on the surface. But boring pays $2.795 a share in annual dividends, and at $43.88, that math does real work in an income sleeve.

The growth story lives in fixed wireless access. Verizon's 5G Home and business FWA products keep adding subscribers at a fast clip, taking share directly from cable at lower price points. On the enterprise side, the company is picking up AI-adjacent contracts as businesses stand up private network infrastructure for data center connectivity and edge computing.

Consumer wireless is still the cash engine. Postpaid phone net adds have stabilized after years of share loss to T-Mobile, and management dialed back promotional intensity roughly 18 months ago to let ARPU do the work. That discipline shows up in the cost line.

The Frontier fiber acquisition, which closed earlier this year, expanded Verizon's fiber footprint well beyond its Northeast base. The market is treating that leg of the story as filler. It shouldn't. Fiber overbuilds are where the next decade of broadband share gets decided.

VZ currently trades at $43.88 and pays a dividend of $2.795 per share, a yield of 6.4%.

Cash Flow

The Coverage Math Is Better Than the Price Suggests

Verizon generates enormous free cash flow, guided in the high teens of billions for 2026. That's more than enough to cover the $11 billion or so in annual dividends with real room left over for debt paydown. Analysts keep anchoring on the leverage story and forgetting the coverage math.

At a market cap of roughly $180 billion and a trailing yield above 6%, VZ trades near 10.7x earnings. A low-growth utility-like business shouldn't sit at that multiple with cash flow this durable.

You keep hearing about AI infrastructure winners, but wireless carriers rarely make the list. That's a mistake. Every hyperscaler data center needs redundant fiber. Every enterprise deploying AI at the edge needs private network capacity. Every autonomous system depends on low-latency wireless backhaul.

Verizon has been signing multi-year enterprise contracts in exactly these categories. Management called out AI-related network demand on the last earnings call, and I expect more color on Q2. This isn't the same story as a chip stock trading at 40x forward earnings. It's a slow-drip revenue tailwind that could add 100 to 200 basis points to enterprise growth over the next few years. Coverage on that angle is thin.

Top Picks (Sponsored)

7 Stocks Selected for the Next 30 Days

Only a tiny percentage of stocks meet the criteria for this report.

Analysts have released a new edition highlighting seven names selected using multiple indicators.

Recent picks have delivered notable short-term gains, though results can vary.

The latest report is now available for a limited time.

Download the free report today.

*This free resource is being sent by Zacks. We identify investment resources you may choose to use in making your own decisions. Use of this resource is subject to the Zacks Terms of Service.
*Past performance is no guarantee of future results. Investing involves risk. This material does not constitute investment, legal, accounting, or tax advice. Zacks Investment Research is not a licensed dealer, broker, or investment adviser.

Q2 Setup

Three Things to Watch on July 24

There are three data points that will move the stock when Verizon reports next Friday.

First, post-paid phone net adds. Consensus is looking for modest growth, and a beat signals the strategic pivot is compounding. Second, wireless service revenue growth. Anything above 3% year over year keeps the story alive. Third, and most important, free cash flow guidance for the back half.

If management holds the line on FCF and hints at accelerating cost takeouts, the multiple should re-rate. That's a $55 stock. If they raise FCF guidance, you're looking at $60-plus over 12 months. The setup asymmetry is what makes this actionable now, not after the print.

Verizon has also raised its dividend for 19 consecutive years, most recently to that $2.795 annual rate. Payout ratio sits comfortably in the 60% range on forward earnings, well within the safety zone for a business generating $17 billion-plus in free cash flow.

The dividend isn't going anywhere. Management has said as much on every call, and the free cash flow math backs them up. What you're really buying is 6% today with the option on modest growth from here.

Hidden Tax Breaks (Sponsored)

3 Overlooked Deductions to Help Potentially Minimize Capital Gains Tax

Capital gains taxes may quietly reduce more of your investment returns than you realize.

But the tax code includes several strategies that may help reduce that bill.

Three often-overlooked areas include investment-related expenses, cost basis adjustments, and real estate selling costs.

When structured correctly, these deductions may help minimize taxable gains.

Because the rules can be complex, many investors work with fiduciary financial advisors to plan tax-efficient strategies.

Use SmartAsset’s free tool to find vetted financial advisors serving your area.

Know What Could Break the Thesis

The bear case is real and worth naming. Verizon carries a heavy debt load, roughly $150 billion in net debt, and higher-for-longer rates increase refinancing costs. The 10-year sitting at 4.55% doesn't help.

Competition from T-Mobile and cable's mobile virtual network operators keeps pricing pressure alive on the low end of the postpaid market. If churn ticks up meaningfully in Q2, the stabilization narrative gets questioned in a hurry.

Capex is the other watchpoint. Fiber overbuilds and 5G densification aren't cheap. If management raises capex guidance materially, the FCF math tightens. Regulatory risk always hangs over telecom too. Spectrum auctions, net neutrality shifts, and antitrust posturing can all move the stock on headlines.