Verizon Surprises Us With Dividend Hike... AT&T Next? (VZ, T)

Verizon Communications Inc. (NYSE: VZ) has just delivered on another dividend hike, making this the fifth consecutive year that the telecom giant has boosted its payout.  The boost is by $0.0125 to $0.50 per quarter for a 2.6% rise in the payout.  What is interesting about this hike here is that we were not sure if the company would be raising its payout as we had become so used to seeing.

Based upon the new $2.00 annualized payout and with a  $36.10 share price, Verizon now offers a yield of almost 5.55%.  Now that AT&T, Inc. (NYSE: T) has fallen down to $28.50 after yesterday’s $1.00+ sell-off after the DOJ moved to block its T-Mobile buyout, AT&T’s dividend yield is about 5.8%.

Some may say that the dividend boost is not enough, but we will again stress that we were not certain that Verizon would be bumping up its dividend.  If AT&T is going to hike its payout, that will not likely come until after one more quarterly payout for that January 2012 quarterly payment.

If you need to know what all the fuss is about a dividend north of 5% it is rather simple.  The 30-year Treasury bond yields only 3.54% and the 10-year yields only 2.17% today.

JON C. OGG