Key Points

Verizon shares deliver a reliable dividend and a strong 6% yield.
The telecommunications leader also benefits from several growth opportunities.

Verizon Communications (NYSE: VZ) once more demonstrated that its shift toward a customer-first approach rather than a pure technology focus is delivering results in its second-quarter report. With a 6% yield and building positive momentum, the stock stands out as one of the most compelling high-yield options available.

Turnaround shows continued progress

A primary goal of the strategy change was lowering churn while attracting fresh subscribers. Results for the quarter reflected this effort, with the wireless provider adding 184,000 postpaid phone subscriptions, marking its strongest quarter for such additions in five years.

Verizon also recorded 348,000 broadband net additions, consisting of 193,000 fixed wireless subscriptions and 155,000 fiber households. Consumer post-paid churn improved to 84 basis points, showing sequential gains for the second consecutive quarter.

Total revenue declined 0.7% year over year to $34.3 billion, driven by a 20% drop in equipment revenue as the company cut back on device subsidies. Service revenue, however, increased 3.5% to $29.2 billion.

Consumer revenue slipped 1.5% year over year to $26.2 billion, though service revenue rose 3.3%. The business segment performed well, with revenue climbing 2.6% year over year to $7.2 billion. Adjusted earnings per share advanced 6.6% to $1.30, and EBITDA grew 7.2% to $13.7 billion.

Looking forward, Verizon expects to reach the upper end of its earlier target of 750,000 to 1 million postpaid phone subscribers for 2026. It raised the lower bound of its full-year mobility and broadband service revenue outlook to a range of 2.5% to 3%, from the prior 2% to 3% forecast. The company also lifted its adjusted EPS guidance slightly to a range of $4.99 to $5.04, implying 6% to 7% growth.

Image source: The Motley Fool.

Stock appears attractive for purchase

Verizon shares retreated earlier in the year amid concerns over potential disruption from Space Exploration Technologies. Yet technology and regulatory hurdles make meaningful competition unlikely without an acquisition of an existing mobile carrier. Meanwhile, the firm is demonstrating that its customer-oriented approach is working through improved retention and higher subscriber growth.

The company is also positioned to benefit from favorable trends. The industry is moving away from heavy subsidies, which should support better gross margins and stronger profitability along with cash flow expansion. Verizon further gains from bundling potential following its Frontier acquisition, as only about one-fifth of Frontier customers currently hold both wireless and broadband services.

Verizon recently announced a $1 billion agreement with Alphabet to supply dark fiber for data center connections. Management views this as the start of additional similar arrangements. Providing both dark and lit fiber to AI data centers represents another meaningful growth avenue.

The primary appeal for many investors remains the dividend and its high yield. The payout looks secure, with unsecured leverage at 2.5 times and substantial free cash flow expected to cover the dividend comfortably this year.

Trading at a forward price-to-earnings ratio of just 9.5 based on 2026 estimates, combined with a well-supported and growing dividend plus solid earnings prospects, Verizon ranks as a leading dividend stock worth considering now.

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Geoffrey Seiler has positions in Alphabet. The Motley Fool has positions in and recommends Alphabet. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.