When Will VZ Distribute its Next Dividend?

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When Will Verizon (VZ) Distribute its Next Dividend?

Verizon Communications Inc. (NYSE: VZ) is one of the largest telecommunications companies in the world, providing wireless, wireline, and internet services to millions of customers. As a publicly traded company, Verizon also pays dividends to its shareholders, which are typically distributed quarterly. However, the timing and amount of these dividends can vary based on multiple factors, including the company's financial performance, market conditions, and strategic priorities. In this article, we will explore when Verizon is likely to distribute its next dividend and what investors should consider before making any investment decisions.

Dividend History and Yield

Before we look at the future, let's review the past. Verizon has a long history of paying dividends, dating back to the 1980s when it was still part of Bell Atlantic. Since then, the company has increased its dividend payout every year for over a decade, making it a favorite among income-oriented investors. As of August 2021, Verizon's dividend yield was around 4.5%, which is higher than the average yield of the S&P 500 index. This means that if you owned $10,000 worth of Verizon stock, you would receive about $450 in annual dividends, or $112.5 per quarter.

Recent Developments

However, past performance is not a guarantee of future results. As thetelecom industryfaces new challenges and opportunities, Verizon has been adapting its business model and investment strategies accordingly. For example, in 2020, Verizon completed the acquisition of BlueJeans Network, a video conferencing company, and sold its media division, including Yahoo and AOL, to Apollo Global Management. These moves suggest that Verizon is focusing more on the enterprise and 5G markets, where it sees more growth potential and less competition. While these decisions might benefit the company in the long run, they could also affect its short-term financials anddividend policy.

Dividend Schedule and Policy

So, when can we expect Verizon to distribute its next dividend? According to the company's dividend schedule, the ex-dividend date for the third quarter of 2021 is July 8, 2021, which means that you must own Verizon shares before that date to be eligible for the upcoming dividend. The payment date is August 2, 2021, which means that you should receive the dividend in your brokerage account around that time. However, the exact amount of the dividend has not been announced yet, as Verizon typically declares its dividends a few weeks before the payment date. Based on the previous payouts, we can expect the dividend to be around $0.64 per share, but this is not a guarantee.

Moreover, investors should not only focus on the dividend amount but also on the dividend policy of the company. Verizon has stated that it aims to return at least 50% of itsfree cash flowto shareholders in the form of dividends and share buybacks. Free cash flow is the cash generated by the company's operations minus its capital expenditures, which reflects its ability to pay dividends sustainably. In 2020, Verizon's free cash flow was over $20 billion, which allowed it to pay $7.8 billion in dividends and repurchase $4.3 billion in shares. However, investors should also be aware that free cash flow can fluctuate based on various factors, such as capital investments, debt repayments, and regulatory costs.

Investment Considerations

Therefore, before investing in Verizon or any other company that pays dividends, investors should do their due diligence and consider multiple factors. These may include the company's financial statements, competitive position, industry trends, regulatory environment, and dividend history and policy. Additionally, investors should diversify their portfolio and not rely solely on dividends for income or growth. Dividends are not guaranteed, and companies can reduce or suspend their payouts if they face financial difficulties or strategic changes. Moreover, dividends alone do not reflect the total return of an investment, which also includes capital gains or losses and taxes.

Conclusion

In conclusion, Verizon is likely to distribute its next dividend in early August 2021, but the exact amount is not yet known. Investors should focus not only on the dividend yield but also on the dividend policy and the company's overall performance and strategy. Dividends can be a valuable source of income and a sign of a company's financial health, but they should not be the only criteria for investment decisions. By doing their homework and diversifying their portfolio, investors can make informed choices that align with their goals and risk tolerance.