Investors looking for income from their portfolio can always appreciate a reliable dividend-paying business. Verizon Communications (VZ 5.11%) is one of those companies. And more recently, it's been not only rewarding shareholders with a high dividend yield but also with a surging stock price. The stock is up more than 15% year to date, and the company's latest quarterly results reinforced the bull case as new CEO Dan Schulman is helping the company reaccelerate its business and reward shareholders with even more capital as Verizon started executing on an aggressive share repurchase program.
Here's why Verizon's first-quarter results only make the bull case for this dividend stock -- and its 6.1% dividend yield -- even stronger.
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Earnings growth accelerates
At first glance, Verizon's results may look unimpressive. Revenue grew just 2.9% year over year to $34.4 billion.
But what's impressive is that the company is demonstrating operating leverage. Verizon's net income rose at a faster rate than revenue, increasing 3.3% year over year. And its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 6.7% year over year to $13.4 billion.
Verizon delivered $1.28 in non-GAAP (adjusted) earnings per share. This beat analysts' estimates and marked the strongest adjusted earnings-per-share growth rate the company has posted in years. And driving home how the company is making progress on profitability, Verizon's adjusted earnings per share rose 7.6% year over year, marking the company's best quarterly year-over-year growth rate since 2021.
"Our first quarter financial results show our disciplined execution is directly translating into operating leverage," explained Verizon chief financial officer Tony Skiadas during the company's first-quarter earnings call. "We are driving financial growth and strong free cash flow even as we undergo a transitional year for revenue.
This earnings momentum came with an important customer milestone. Verizon reported 55,000 total postpaid phone net additions in the first quarter of 2026 -- its first positive first-quarter result on this metric since 2013. That is a sharp reversal from the year-ago period, when postpaid phone net losses totaled 289,000, and suggests the company's efforts to reduce churn and improve customer economics may be working.
Impressive guidance
Management's full-year outlook added to the case that Verizon's turnaround has some traction. Verizon raised its 2026 adjusted earnings-per-share guidance to $4.95 to $4.99, representing year-over-year growth of 5% to 6%. This is a nice uptick from management's previous guidance for 4% to 5% growth.
And moving down to the cash flow that supports the company's dividend, Verizon maintained its outlook for free cash flow of at least $21.5 billion -- a huge figure for a company with a market capitalization of $197 billion.
A mouth-watering capital return program
And speaking of the company's dividend, Schulman noted that Verizon has an "ironclad commitment," so investors should be able to count on it.
Further, this dividend is growing. The company's latest increase was a 2.5% boost, marking Verizon's 20th consecutive year of dividend increases.
Even more, the company's dividend isn't Verizon's only shareholder-return lever anymore. Verizon completed $2.5 billion in share repurchases in the first quarter and remains on track to repurchase at least $3 billion for the full year. The buyback reflects management's "conviction in the value of the stock at current levels," said Skiadas during the company's earnings call.
NYSE: VZ
Key Data Points
A cheap valuation
Best of all, the stock is cheap.
Shares currently trade at just 10 times the midpoint of management's 2026 adjusted earnings-per-share guidance.
There are risks, of course. Verizon's debt load is still substantial, and the Frontier acquisition pushed net unsecured debt higher in the quarter. Further, competition from AT&T and T-Mobile remains intense.
But Verizon's lucrative dividend helps offset these risks, as investors are compensated to hold shares while the company dukes it out in the intensely competitive wireless carrier market. In addition, the company's strong quarterly results arguably bolster the bull case.
