The stock market is struggling this year but if you're a long-term investor, that can give you the opportunity to buy some dividend stocks at higher-than-usual yields. Dividend yield is a function of both share price and the company's dividend. And if share price goes down, the dividend yield goes up since you're collecting the same dividend but it's costing you less to own the stock.
That's what makes Verizon Communications (NYSE:VZ) an attractive option right now. The business is sound, and the company even beat expectations in its most recent earnings report. Adjusted earnings per share (EPS) of $1.32 came in better than the $1.29 per-share profit that analysts were expecting. Revenue totaling $34.2 billion for the third quarter also beat Wall Street projections $33.8 billion.
However, shares of Verizon still fell 5% on Friday and hit a new 52-week low as the company reported that in its consumer business, its wireless postpaid phone subscribers were down 189,000. Verizon blames this in part on the company recently raising prices.
Overall, the company's bottom line declined by 23% to $5 billion. But even with the decline, the company's EPS of $1.17 is still far higher than its quarterly dividend payment of $0.6525. And so for dividend investors, there shouldn't be an overwhelming concern about the company's payouts.
Although Verizon may be losing subscribers, the business is still doing well overall. With an opportunity to scoop up a yield as high as 7.4%, long-term investors shouldn't pass up what could prove to be a rare opportunity to buy this top telecom stock at a considerable discount.
