Verizon (VZ 1.18%) has long been beloved by investors for its bountiful and consistent dividend payments through all manner of market environments. The telecommunications leader has increased its quarterly cash payout for 16 straight years, an impressive streak that's likely to continue for many years to come. 

But a good investment has more than just a reliable dividend. Let's take a closer look at Verizon's competitive position, growth drivers, financials, valuation, and risks to see if its stock is an attractive buy today.

The bull case for Verizon's stock

More than 140 million people rely on Verizon for their wireless needs. This massive subscriber base provides the telecom titan with a dependable source of recurring revenue and profits.

Fifth-generation (5G) wireless and broadband internet services represent intriguing growth opportunities for Verizon. Blazingly fast download speeds should spur individuals and businesses to consume more data, prompting them to pay up for Verizon's higher-margin plans.

Moreover, the ability to bundle wireless and home internet services helps to make Verizon's offerings stickier for consumers. Lower churn rates could further bolster Verizon's profitability and help to offset a slow decline in the company's legacy wireline business.

Better still, Verizon is a cash-generating machine. It produced a whopping $28.2 billion in operating cash flow over the first three quarters of 2022. Its investments in spectrum and other capital expenditures were $15.8 billion during that time. Verizon's free cash flow thus totaled $12.4 billion over this period. That's enabled the company to reward its investors with more than $8 billion in dividend payments already this year. 

Best of all, Verizon's stock is cheap. Following a 25% decline over the past year, the wireless giant's shares can currently be had for about 8.4 times its trailing 12-month earnings. The company's forward price-to-earnings (P/E) multiple is an even more attractive 7.6, based on Wall Street's estimates for 2023. Additionally, Verizon's dividend yield now stands at a sizable 6.8%. 

Risks for investors to consider

Verizon's impressive cash flow production has allowed it to borrow vast sums to invest in its network and other growth initiatives. Its debt load now stands at nearly $150 billion. That's a staggering amount -- one that investors should not overlook.

Verizon could find it more expensive to refinance this debt if interest rates continue to rise. Prudently, the company is implementing a cost-cutting plan to reduce expenses by as much as $3 billion annually by 2025, to bolster its profitability and ability to pay down its debt burden over time.

Fierce competition is an even greater risk for investors. Following the divestiture of its Warner Media assets in April, AT&T (T 0.28%) has emerged as a more formidable rival. No longer distracted by its misguided entertainment ambitions, AT&T can now focus its vast resources on its wireless and broadband operations. And those efforts are bearing fruit. AT&T added 813,000 post-paid phone subscribers, who are generally the most highly sought-after customers for wireless carriers, in the third quarter. 

T-Mobile (TMUS 0.41%) is another worrisome threat. The telecom's acquisition of Sprint in 2020 helped it strengthen its already impressive network. T-Mobile, in turn, has earned high marks for 5G coverage, reliability download speeds, and other performance metrics. Consumers have apparently noticed; 854,000 net new postpaid phone subscribers joined T-Mobile's network in Q3. 

For comparison, Verizon added only 8,000 postpaid phone subscribers in its most recent quarter. These results suggest Verizon is losing market share to its competitors in its most important customer segment.

So, is Verizon's stock a buy?

Rising demand for 5G wireless services could be a lucrative opportunity for Verizon. But recent trends suggest that rival telecoms AT&T and T-Mobile are better positioned to compete and win within this vital market. So, despite its low price, Verizon's stock might not be the bargain it appears to be. Investors should avoid its shares until Verizon shows it can match AT&T's and T-Mobile's subscriber gains.