One thing many analysts will be watching this week is whether U.S. telecommunications giant Verizon Communications Inc. (NYSE:VZ) will indeed move to raise its dividend, something the company has consistently done for the past 10 years.
One of the worst performing members of the Dow, Verizon has for some time now become a value play for investors looking to make money on a reversion toward a longer-term growth trend, something which has thus far this year eluded investors.
Since the beginning of the year, Verizon has lost 13% of its value, and has continued to carry its negative momentum forward throughout the year, making this a hard stock to gauge moving into the latter part of 2017.
Among the effects of the recent dip in Verizon shares is the upswing in the company's yield, a yield which now sits at 5%. Boasting the highest yield on the Dow may be something many income-focused investors will look for, although safety and long-term growth are two considerations investors will have.
Should Verizon's management team indeed decide to freeze the company's dividend, I would expect the market may turn a cold shoulder toward Verizon, adding extra risk to the company's already volatile stock price.
I expect that Verizon will make a similar move to last year, in which the company increased its dividend by a marginal amount, to allow the streak to continue, but more importantly, signal to the market that the company believes its cash flows will continue to grow over time.
Invest wisely, my friends.
