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5 Dow Dividend Stocks to Beat the S&P

Verizon Communications

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AT&T's top rival, $145 billion Verizon Communications (VZ), is another name that makes our list of Dow Dogs. Verizon, like AT&T, is a major mobile and fixed-line communications carrier, boasting a landline network that reaches one in four U.S. homes and a mobile phone network that's 100 million customers strong.

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While Verizon Wireless is the biggest phone carrier in the country, VZ isn't the largest mobile carrier stock. The reason? Overseas carrier Vodafone (VOD) owns 45% of Verizon Wireless -- which means that VZ shareholders "only" lay claim to around 55 million wireless subscribers. A considerable chunk of Verizon's efforts (and its CapEx) have been spent on its wireline networks in recent years. The firm spun off many of its legacy assets to Frontier Communications (FTR) in order to bankroll its costly FiOs fiber optic network. FiOs isn't cheap (some estimates put CapEx costs at $4,000 per installed home), but it's the future of residential and commercial connectivity.

By biting the bullet on infrastructure spending now, Verizon gains a dramatically better network than peers at a time when rates are next to zero and most big cash generators are looking for a better way to invest their corporate treasuries.

That's not to say Verizon has been ignoring conventional means of peeling off its cash. The firm currently shells out a 4.04% dividend yield that, while not as hefty as AT&T's, is plenty substantial in its own right. While Verizon's business is capital intense and its debt load is hefty, subscriptions create plenty of cash to keep on rewarding shareholders too.

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