High-Dividend Stock with a Strong Yield: An Obvious Choice for Investors
In the final quarter of 2022, Verizon Communications reported a positive shift in its wireless business, with 217,000 wireless postpaid additions and a halt in market share losses. This encouraging trend is set to continue as the company focuses on expanding its fixed wireless and streaming bundle offerings.
5G Expansion and Fixed Wireless Access (FWA)
Verizon's deployment of 5G networks enables it to offer fixed wireless internet as a competitive alternative to traditional wired broadband. With growing demand for affordable, high-speed access, the fixed wireless segment is poised for success.
Growth of Mobile Virtual Network Operators (MVNOs)
Partnerships with MVNOs, which lease network capacity to provide more tailored and competitively priced mobile services, broaden Verizon’s customer reach without heavy infrastructure costs. This strategy enhances its wireless revenue streams.
Wireless-Streaming Bundles
As streaming consumption grows, Verizon can bundle wireless services with streaming content, increasing customer retention and value proposition. The wireless-streaming bundles capitalize on growing digital media consumption and consumer willingness to pay for integrated service packages.
Market Growth Projections and Revenue Outlook
Industry forecasts project increasing revenues in related sectors, such as the MVNO market expected to grow at a CAGR near 7% through 2033, and Wi-Fi as a Service markets nearly doubling by 2030 at a CAGR of 18.8%. These macro trends support Verizon’s plans for expanding fixed wireless and bundled offerings.
Stock Market Confidence
Forecasts of Verizon’s stock price rising significantly through 2035 indicate investor confidence in the company’s strategic direction, driven partly by its wireless and fixed wireless growth avenues.
However, it's important to note that Verizon's high network investment in 2022 led to a reduction in free cash flow. Despite a high debt load of $150.6 billion, Verizon is reducing capital expenditures and expects to grow high-margin service revenue between 2.5% and 4.5% in 2023.
Verizon's current dividend stands at $2.61 per share annually, offering a 6.3% yield at today's share price. The company, a dividend stock, paid out $10.8 billion in dividends from $14.1 billion in free cash flow last year.
Verizon's stock symbol is VZ, and the company has started streaming bundles with Disney and Apple, with expectations of continued growth in this area. Verizon added 379,000 fixed wireless customers in the fourth quarter of 2022, bringing the total to 1.4 million. The growth in fixed wireless is expected to continue as an alternative to cable broadband for years.
In conclusion, Verizon's future growth in fixed wireless and wireless-streaming bundles is underpinned by 5G network expansion, strategic use of MVNO partnerships, increasing demand for affordable high-speed wireless internet, expanding streaming usage, and favorable market forecasts. With its reduced capital expenditures and high-margin service revenue growth, Verizon presents an attractive proposition for long-term investors.
- Verizon's strategic expansion into the fixed wireless segment, facilitated by its 5G networks, aligns with the growing demand for affordable, high-speed internet access, positioning it as a competitive contender in the finance and technology arena.
- The partnerships with Mobile Virtual Network Operators (MVNOs) not only enhance Verizon's customer reach but also strengthen its wireless revenue streams, making it a lucrative spot for investors in the rapidly growing MVNO market.
- In line with the increasing digital media consumption, Verizon capitalizes on the opportunity by offering wireless-streaming bundles, which not only boost customer retention but also align with the expected growth in the Wi-Fi as a Service market.
- With the growth projections in related sectors and the positive outlook for its wireless and fixed wireless ventures, Verizon's stock price is anticipated to rise significantly, offering an appealing opportunity for long-term investors in the finance and investing world.
