Trading Dividend Stock Verizon Communications
Due to the decline in global stock markets this year and the surge in volatility over the past several weeks, some investors have now turned their attention to dividend-paying stocks. These are stocks that pay out a share of profits on a quarterly basis.
At the close of trading on Monday 26 September, the dividend yield for well-known telecommunications company Verizon was 6.70%. This means investors could get paid 6.70% a year by holding the stock through the shareholder’s record date for all four quarters.
Learn how to trade Verizon shares below.
|Stock:||Verizon Communications Inc|
|Symbol for Invest.MT5 Account:||VZ|
|Date of Idea:||27 Sept 2022|
|Time Line:||1 - 6 months|
|Position Size for Invest.MT5 Account:||Max 2.5%|
- The Invest.MT5 account allows you to buy real stocks and shares from 15 of the largest stock exchanges in the world.
All trading is high risk and you can lose more than you risk on a trade. Never invest more than you can afford to lose as some trades will lose and some trades will win. Start small to understand your own risk tolerance levels or practice on a demo account first to build your knowledge before investing.
Verizon’s Dividend Paying Potential
Dividend yields are calculated by dividing the annual dividend per share by the stock’s price per share. According to Verizon’s dividend history, the annual dividend is $2.61. The stock’s closing price on Monday 26 Sept was $38.93.
This means Verizon has an annual dividend yield of 6.70%. This figure will change daily as the stock closes at a different price each day. In the last quarter, the Board of Directors at Verizon increased the quarterly dividend to $0.6525 per share.
This was the 16th consecutive year of increasing dividends. According to CNBC, Morningstar revealed that Verizon is one of its top stocks with the highest dividend yield. While analysts at the firm highlight they expect Verizon to deliver ‘consistent results’ there is a reason why the dividend yield is high.
As the stock price falls, the dividend yield will increase. One factor to take into consideration is that if the stock price has fallen – increasing the dividend yield – will the company continue to payout the dividend?
This is why looking at only the dividend yield is a high-risk approach. There also needs to be some analysis of company fundamentals and why the stock price has fallen to ensure there is still long-term growth – and the payment of the dividend – is still possible.
Verizon shares are down around 28% this year so far. The stock has not only been affected by the 23% fall in the S&P stock market index so far but by rising competition and investment into a costly 5G rollout.
That said, the balance sheet has enough to cover the dividend while the stock is approaching technical support from $38.00 to $32.00 constructed of a horizontal support line from the lows of 2015 and an ascending trend line from 1984 to 2008.
Verizon Stock Forecast - What do the Analysts Say?
According to analysts polled by TipRanks for a Verizon stock forecast in the past 3 months, there are currently 2 buy, 13 holds and 2 sell ratings on the stock. The highest price level for a Verizon stock forecast is $64.00 with the lowest price target at $33.00.
The average price target for a Verizon stock forecast is $50.09.
Source: TipRanks, 27 Sept 2022
An Example Trading Idea for the Verizon Stock Price
An example trading idea for the Verizon share price could be as follows:
- Buy the stock at $38.10 to allow for current market volatility.
- Target just below the average analyst price target at $50.00.
- Keep your risk small at a maximum of 2.5% of your total account.
- Time Line = 1 – 6 months
- If you buy 10 Verizon shares:
- If target is reached = $119.00 potential profit ($50.00 - $38.10 *10 shares) plus any dividend payouts.
Remember that markets go up and down and it is unlikely the share price will move up in a straight line. In fact, it may even go much further down before it rises, especially considering that Verizon stock is currently down around 28% this year.
Be sure to exercise good risk management and always know how much you could potentially lose on a trade and the risks involved, as well as the costs.
With the Admirals Invest.MT5 account you can buy US stocks from $0.02 per share. This means buying 10 shares in Verizon would result in a commission of $0.20 ($0.02 * 10 shares).
There is a low minimum transaction fee of $1. So, the example trading idea above would result in a commission of just $1 overall!
How to Buy Verizon Stock in 4 Steps
With Admirals, you can buy shares in companies like Verizon with a low commission of just $0.02 per share and a low minimum commission of just $1 on US stocks.
- Open an account with Admirals to access the Trader’s Room.
- Click on Trade on one of your live or demo accounts to open the web platform.
- Search for your stock at the bottom of the Market Watch window and drag the symbol onto the chart.
- Use the one-click trading feature, or right-click and open a trading ticket to input your trade size, stop loss and take profit level.
Source: Admirals MetaTrader 5 Web. Past performance is not a reliable indicator of future results, or future performance.
Click on the banner below to buy Verizon stock today! ▼▼▼
Do You See the Verizon Stock Price Moving Differently?
Remember that all analytics and trading ideas are based on the personal view and experience of the author.
If you believe there is a higher chance Verizon's share price will move lower, then you can also trade short from a CFD (Contracts for Difference) trading account which Admirals also provide.
This means you can trade long and short to potentially profit from rising and falling stock prices. Learn more about CFDs in this How to Trade CFDs article.
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