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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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DD $66.46 -1.50%
INTC $31.11 -2.02%
MRK $55.74 -1.01%
T $38.64 -0.21%
VZ $51.02 -1.30%


Chart of I:DJI
DOW 17,830.76 -210.79 -1.17%
S&P 500 2,075.81 -19.34 -0.92%
NASDAQ 4,805.2910 -57.85 -1.19%

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