Is Verizon a Buy? Q1 Results and Solid Dividend Make Bullish Case

Verizon Communications (NYSE: VZ) is a leading U.S. telecommunications company that plays a pivotal role in how millions of individuals and businesses connect. Verizon Communications' first-quarter 2025 financial results demonstrated encouraging operational and financial progress, upholding its long-standing reputation for consistent dividend-based shareholder returns. This positive momentum, combined with favorable analyst sentiment, projected analyst upside, and a defensive positioning amid recessionary and tariff concerns, presents a compelling investment case for the stock.

 In recent trading sessions, Verizon's stock price decline has prompted investors to consider whether the current dip presents a buying opportunity for this dividend-paying stock, potentially making it a foundational addition to their portfolio. 

Verizon Delivers Solid Revenue and Earnings Growth

Verizon's financial performance in the first quarter of 2025 clearly indicates its current operational strength. The company reported total operating revenues of $33.485 billion, a 1.5% increase compared to the same period in the prior year.

This growth was primarily driven by its core service revenues, which climbed 1.7% year-over-year to $28.087 billion, underscoring the consistent demand for Verizon's primary offerings. Wireless equipment revenues also saw a modest increase, reaching $5.398 billion, up 0.7%.

Profitability metrics also showed positive trends. Net income attributable to Verizon for the quarter rose to $4.879 billion, a significant 6.0% increase year-over-year. This translated into diluted earnings per share (EPS) of $1.15. On an adjusted basis, which excludes certain items to provide a clearer view of ongoing operational profitability, Verizon reported diluted EPS of $1.19.

This figure notably surpassed analyst consensus estimates of $1.15, a key indicator that the company is performing better than market expectations. 

Furthermore, Verizon demonstrated healthy cash generation. Cash flow from operations reached $7.8 billion for the first quarter, and the company generated $3.6 billion in free cash flow (a non-GAAP measure calculated by subtracting capital expenditures from cash flow from operations).

Free cash flow is a critical metric for investors as it represents the cash available to the company after funding its operational and capital needs, which can then be used for dividends, debt repayment, or further investments, highlighting Verizon's financial flexibility.

Verizon: Winning in the Communications Sector

Beyond its established mobile services, Verizon is making significant strides in expanding its broadband footprint, particularly through its Fixed Wireless Access (FWA) offerings. In the first quarter of 2025, Verizon added an impressive 308,000 FWA net subscribers.

This growth is a testament to the increasing consumer and business demand for alternative high-speed internet solutions. The total FWA subscriber base has now surpassed 4.8 million, and the company has set an ambitious target of reaching 8 to 9 million FWA subscribers by 2028, signaling a key avenue for future revenue expansion.

The company's fiber-optic service, Fios Internet, also continued its positive trajectory, adding 45,000 net subscribers in the quarter. This demonstrates ongoing demand for the high-speed, reliable connectivity that fiber provides.

Verizon's total broadband net additions in Q1 2025 were 339,000, underscoring its successful multi-pronged approach to capturing market share in the broadband space.

Verizon also reported positive momentum in the business segment, with 94,000 wireless retail postpaid net additions. This figure includes 67,000 postpaid phone net additions, indicating strength in serving the connectivity needs of enterprise and government customers.

This growth in the business segment diversifies Verizon's revenue streams and highlights its capacity to cater to a broad range of clients.

Anchor for Income: Verizon's Reliable Dividend

Verizon's consistent and attractive dividend is a key appeal for investors. As of May 13, 2025, the dividend yield is 6.36%. The annual dividend is $2.71 per share, paid quarterly at $0.6775.

Verizon has a long history of reliable dividend payments since 2000, with 20 consecutive years of increases as of 2022, signaling financial stability. The dividend's sustainability is supported by payout ratios of approximately 64.52% of earnings and a more conservative 30.52% of cash flow, indicating it is well-covered.

Why Verizon Remains a Stable Bet

The U.S. telecommunications sector is undeniably competitive. However, Verizon navigates this environment from a position of significant strength. The company is a market leader with extensive network infrastructure, including its expanding 5G and fiber optic networks, and a large, established subscriber base.

These assets provide a considerable competitive moat and a foundation for sustained service delivery.

While the company, like others in the capital-intensive telecom industry, maintains a notable debt level (a debt-to-equity ratio of 1.21 as of March 31, 2025), this largely reflects the substantial investments required to build, maintain, and upgrade its critical infrastructure.

These investments are essential for future growth initiatives such as the nationwide 5G rollout and the expansion of Fixed Wireless Access. It is noteworthy that Verizon's total unsecured debt saw a slight reduction in the first quarter of 2025 compared to the end of the fourth quarter of 2024, indicating prudent financial management.

From a stock characteristic perspective, Verizon exhibits a low beta of 0.39. Beta measures a stock's volatility in relation to the overall market. A beta less than 1 indicates that the stock is less volatile than the market, which can be an attractive quality for investors seeking relative stability in their portfolios. 

Verizon: A Bullish Case for Stability and Income

Verizon Communications' recent performance and strategic positioning provide a compelling picture for potential investors. The financial results in the first quarter of 2025, highlighted by revenue growth and an earnings beat, demonstrate operational strength.

The company's successful execution in expanding its broadband services, particularly the rapid growth in Fixed Wireless Access subscribers, points to significant future growth avenues.

Furthermore, Verizon's long-standing commitment to shareholder returns solidifies its appeal for income-focused portfolios. This is complemented by a positive endorsement from the analyst community, which largely maintains a Moderate Buy rating and sees potential upside in the stock's value.

While operating in a dynamic industry, Verizon's market leadership, ongoing network investments, and demonstrated financial resilience provide a strong foundation. The combination of these factors suggests that Verizon offers a noteworthy blend of stability, income potential, and prospects for continued growth, making it a consideration for investors navigating the current market terrain.

Companies Mentioned in This Article: