When it comes to finding great stocks to hold for the long-term, investors have many routes that can be taken to accumulate wealth.
Some stocks are value-oriented, offering shareholders a cheap purchase price relative to the earnings power of the business. Some offer high levels of growth, promising future price appreciation based upon much higher earnings. And of course, some offer high dividend yields, which are attractive not only for income-oriented investors that want to use dividends to live off of, but for those that want to reinvest dividends as well.
We believe the sweet spot of dividend stocks is to buy ones that have more than one of these traits, and in this article, we’ll take a look at three high-dividend stocks we think investors can hold for the long-term.
Hear Me Now on This One
Our first stock is Verizon Communications (VZ) , which offers communications, technology, and entertainment products and services to consumers and businesses globally. The company is perhaps most known for its wireless phone service, and the hardware sales related to that business. Verizon has an enormous, nationwide 5G network built out to support that business, giving it a competitive advantage in that space. The company has about 115 million wireless retail connections, in addition to seven million broadband connections, and about four million Fios connections.
Verizon was formed in 1983, generates about $137 billion in annual revenue, and trades today with a market cap of $153 billion.
Despite being what amounts to a utility, Verizon actually has a decent history of earnings growth. In fact, the company’s five-year earnings-per-share growth rate has averaged nearly 7%. We think Verizon’s growth going forward will be more like 4% annually, and that it will be driven by revenue growth, primarily. Verizon is buying back stock in small quantities, so it is likely to see a modest tailwind from that effort as well.
The stock is extremely cheaply valued today as well, as it trades for just 7 times this year’s earnings estimates. That compares very…
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