Verizon Communications has quietly been rebuilding its investment case. New CEO Dan Schulman took the reins in October 2025 and wasted no time making big moves.Â
He slashed$9 billion in combined operating and capital expenses, closed the $20 billion acquisition of Frontier Communications, and authorized a $25 billion share buyback program.
That’s a lot of change in a short time. But for dividend investors, the Dow 30 stock still offers a compelling yield in 2026.Â
A dividend stock built on 20 years of hikes
Verizon (VZ) raised its dividend for the 20th straight year in January 2026. That kind of consistency is rare.
Schulman called the company’s commitment to annual dividend increases “ironclad” during a Morgan Stanley investor conference in March.
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Schulman explained:
“We raised our dividend again for the 20th straight year, and I don’t want to be the CEO that doesn’t do that every single year going forward. That is an ironclad commitment for us.”
Chief Financial Officer Tony Skiadas echoed that sentiment at a Deutsche Bank conference, telling investors the company’s goal is to “put the Board in a position to continue to raise the dividend per share in the future.”
Key dividend metrics for VZ stock:
- Dividend yield: ~5.6%
- Annualized dividend per share: $2.83
- Estimated dividend per share (2027): $2.87
- Consecutive years of dividend growth: 20
- Dividend payout frequency: Quarterly
- 5-year dividend CAGR (2025–2030 estimate): ~1.9%
- Free cash flow (2025 actual): $20.13 billion
- Free cash flow guidance (2026): At least $21.5 billion
- Free cash flow CAGR (2025–2030 estimate): ~5.4%
The annual dividend expense for Verizon stock is around $12 billion. Given its 2026 FCF estimates of $21.5 billion, the telecom giant has enough room to reinvest in growth projects, acquisitions, and lower debt levels.Â
The yield alone puts Verizon in rare company. At roughly 5.5%, it’s well above the S&P 500 average. And unlike many high-yielders, this one is backed by serious cash generation.
The cash flow story is the real edge
Dividend stocks live or die by the strength of the business behind the payout. That’s where Verizon outperforms most peers.Â
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The company guided to at least $21.5 billion in free cash flow for 2026. That’s a 7%-plus increase from the $20.13 billion generated in 2025.
It’s also more than enough to cover both the dividend and the new buyback program.
How is Verizon getting there?
- The $5 billion in operating cost cuts is a big piece of it.
- The company trimmedroughly 13,000 jobs, reduced its contract workforce, and is decommissioning legacy copper networks.Â
- It also trimmed capital spending by about $4 billion by focusing only on its wireless and fiber broadband buildout.
Skiadas explained the logic at the Barclays Communications Symposium in February. The company cut spending in areas “not aligned to growth”: things like business wireline, wholesale, and projects with “too long of a payback.”
The result? Adjusted EBITDA of $50 billion in 2025, with analysts forecasting it climbing to $53 billion in 2026 and $58 billion in 2030.
Growth levers that support the dividendÂ
A great dividend stock needs more than a good yield today. It needs a business that can sustain and grow that payout over time.
Verizon’s two biggest growth drivers right now are wireless subscriber growth and broadband expansion.
On the wireless side, the company is targeting750,000 to 1 million postpaid net additions in 2026.
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That’s two to three times what it added in 2025. The main lever isn’t aggressive promotions but churn reduction.Â
Schulman said reducing churn by just five basis points gets Verizon more than halfway to its net add target. A stickier customer base means more predictable revenue.
On broadband, the Frontier acquisition gave Verizon over 30 million fiber-passed homes overnight.
Skiadas noted that converged customers — those who bundle wireless and fiber together — see 30% lower churn than standalone wireless customers.
Over time, that convergence strategy should support both revenue growth and margin expansion.
Analysts estimate normalized EPS will grow from $4.71 in 2025 to $6.64 by 2030, a 7.1% compound annual growth rate. That gives Verizon the financial headroom to keep raising the dividend year after year.
Buybacks add a second layer of return
In addition to the dividend, the board authorized up to $25 billion in share repurchases over three years, with at least $3 billion targeted for 2026 alone.
Fewer shares outstanding means each remaining share represents a larger slice of future earnings and cash flow. It’s a compounding effect that makes the dividend more sustainable over time.
Even as Verizon raises the dollar amount of its dividend annually, the total cash spent on dividends will actually peak soon and then decline because buybacks are shrinking the share count. That dynamic strengthens the balance sheet and rewards shareholders.
For investors hunting for a high-yield dividend stock with genuine staying power, Verizon’s combination of 5.6% yield, 20 years of consecutive increases, and improving free cash flow trajectory deserves serious attention.
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