Over 1 million Verizon Communications (VZ 1.14%) customers lost cellphone service for several hours on Wednesday, Jan. 14, 2026. The outage didn't just hurt the telecom giant's public image; it's also impacting Verizon financially. The company announced last week that it's offering a $20 credit to anyone who experienced problems.
With this kind of bad news, you might think it's best for investors to stay away from Verizon for a while. I disagree. Here's why I just bought the stock despite Verizon's highly publicized outage.
Image source: Verizon Communications.
What hasn't changed with Verizon
The bottom line is that Verizon's long-term growth prospects haven't changed. All the reasons to consider buying the stock before last week remain intact. Those reasons include the company's improving free cash flow and the likely growth coming by the end of the decade from the introduction of 6G wireless networks.
They also include a potentially transformative deal. Verizon announced on Jan. 15, 2026, that all regulatory approvals required to acquire Frontier Communications (FYBR +0.13%) had been completed. The transaction is expected to close on Jan. 20, 2026. Verizon's acquisition of Fronter is set to expand the company's fiber access to nearly 30 million homes and businesses.
Verizon CEO Dan Schulman won't alter his plans to reshape the company's business, either. Schulman said in Verizon's October 2025 quarterly update that he intends to "aggressively transform" the company's culture, cost structure, and financial profile.
For income investors, Verizon's dividend remains highly attractive. The telecom leader's forward dividend yield tops 7%. In the fourth quarter of 2025, Verizon increased its dividend for the 19th consecutive year.
NYSE: VZ
Key Data Points
What has changed (a little)
Granted, Verizon's costs from last week's outage could exceed the $20 million or so the company will incur in credits to affected customers. Some could choose to switch wireless carriers as a result of the incident. However, if history is any guide, the impact on Verizon shouldn't be long-lasting.
For example, on Feb. 22, 2024, thousands of AT&T (T 1.01%) customers lost cell service. Since then, AT&T's share price has risen by around 40%. Any negative effect on the communications stock was only temporary. I expect the same will be true for Verizon with its recent service disruption.
Verizon's share price dipped last week following disruptions to its cell service. However, the slight decline made the stock's valuation even more attractive. Verizon's forward price-to-earnings (P/E) ratio now stands at roughly 8.1. That multiple is well below AT&T's and T-Mobile's (TMUS 2.28%) forward P/E ratios of 10.6 and 15.7, respectively.
I think the net impact of Verizon's outage is that its stock is actually a better pick for long-term investors. If the company has further service problems, that could change. Assuming that doesn't happen, though, I'll probably buy even more Verizon shares later this year.
