Given that so many blue chip dividend stocks are old companies from defensive or value sectors, investors can be forgiven if they don’t readily associate dividends with rapid short-term gains.
On that note, it’s not a stretch to say Verizon Communications (VZ 1.78%) usually isn’t atop investors’ “millionaire maker” lists. The telecom giant may not be on those lists at all, particularly as so many newer market participants come of age amid extended leadership by growth stocks.
Verizon’s free cash flow supports a dividend that could be a wealth-enhancer. Image source: Getty Images.
Still, even the most growth-enthused investors ought to consider some dividend exposure. From 1957 through May 2025, dividends accounted for nearly a quarter of the S&P 500‘s average monthly return. Sometimes the percentage is higher, and sometimes it’s lower, but the point is that dividends are helpful in investors’ quest to reach the seven-figure club, which could heighten the allure of Verizon.
Dial up dividend yield, growth with Verizon
One reason Verizon stock has so many fans in the equity income community is its 6.12% dividend yield, nearly 6x what investors earn on a basic S&P 500 index fund.
Dividend yield can be seductive, and not always in a positive way. Sure, when that metric is high, it can drive eyeballs to a stock, but yield alone doesn’t paint a full picture of a company’s payout sustainability. Actually, elevated yields can be red flags, signaling to investors that the financially strapped companies to which those yields belong may be nearing dividend cuts or suspensions.
Fortunately for investors evaluating Verizon as a potential wealth enhancer, this stock isn’t a yield trap. It’s actually a dividend growth story, as highlighted by a 19-year payout increase streak. That’s the kind of dependability dividend investors crave, and that reliability is crucial in evaluating Verizon’s wealth-building chops.
Today’s Change
(-1.78%) $-0.84
Current Price
$46.38
Key Data Points
Market Cap
$196B
Day’s Range
$46.38 – $47.34
52wk Range
$38.39 – $51.68
Volume
27M
Avg Vol
31M
Gross Margin
45.79%
Dividend Yield
5.96%
Good news: This dividend and its potential growth are backstopped by an impressive free cash flow trajectory. In 2025, Verizon generated free cash flow of $20.1 billion, up from $19.8 billion the year prior. The company forecast 2026 free cash flow of at least $21.5 billion, which would be good for the highest level since 2020.
A dividend call worth answering
Among dividend stocks that can help patient investors boost their net worth, Verizon is a call worth answering. The aforementioned growing free cash flow confirms this, as last year the company directed 60% of that cash flow to dividends.
Verizon also expects net leverage to decline to management’s desired range at some point in 2027, even as it buys back shares this year. For investors who want more near-term insight into cash flow and debt reduction, those issues may be highlighted when Verizon reports first-quarter results on April 27.
