The stock market’s bumpy ride continues. Days when inflation appears to be at bay, or when a large company posts strong earnings, the entire market can rise. Days when fears of inflation or recession hit, the market sells down.
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One thing unlikely to happen is a recovery of the price of the shares in big tech companies. Now viewed as having been overvalued early this year, the stocks of Amazon, Facebook and Google parent Alphabet have been hammered.
Investors have moved to so-called safe haven stocks. None of these is a stronger choice than Verizon Communications Inc. (NYSE: VZ).
Verizon’s key businesses may not be recession-proof, but they are close. Its wireless business is one the big three in the United States, along with AT&T and T-Mobile. Americans, in their minds, can barely survive without wireless broadband. New super-fast 5G has set off a new round of demand for wireless service.
Verizon’s earnings for the most recent quarter were mediocre. Nevertheless, the company remains solid financially. Guidance for the balance of the year disappointed Wall Street, and Verizon shares sold off. However, one byproduct of this is a dividend yield of 5.65%, which is almost unheard of among major U.S. companies.
24/7 Wall St.The stock’s sell-off almost certainly is over. The market has digested what it will from Verizon’s last earnings statement. The company has the balance sheet to keep its dividend intact, which, by itself, makes the shares a near-perfect hedge in a market that is likely to jump around for the balance of the year.
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