Is Verizon Communications Inc. (VZ) the Best Performing Dividend Stock to Buy Now?
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We recently compiled a list of the 14 Best Performing Dividend Stocks To Buy Now. In this article, we are going to take a look at where Verizon Communications Inc. (NYSE:VZ) stands against the other dividend stocks.
Dividend stocks have taken a backseat in the market as technology and AI-driven equities have soared to record highs. However, analysts at Ned Davis Research believe that a more challenging macroeconomic landscape this year could create opportunities for dividend stocks to regain momentum.
Amid concerns about economic growth and uncertainty surrounding former President Trump’s tariff policies, investors have been turning to defensive strategies. In this environment, dividend stocks have proven resilient, offering both stability and attractive passive income. The Dividend Aristocrat index, which tracks companies with a history of at least 25 years of consistent dividend growth, has climbed by over 5.3% in 2025. In contrast, the broader market has declined by nearly 1.7%, as of the close of March 7.
READ ALSO: 13 Best Cheap Dividend Stocks To Buy Right Now
While analysts remain cautious about the market’s ability to sustain its recent gains, dividend stocks have increasingly drawn their attention for several reasons. According to Ameriprise Financial, the S&P index is widely regarded as one of the most significant benchmarks for global equity markets. Over the past decade, dividend growth and share buybacks have become defining characteristics of the index, which includes numerous global dividend-paying companies. Dividend growth saw a sharp slowdown in the final quarter of 2024, largely attributed to the election and uncertainty surrounding potential policy changes. With these concerns now in the past, Ameriprise Financial expects a resurgence in dividend growth within the broader market. For 2025, projections indicate a potential 8% increase in dividend payouts, following growth rates of 6% in 2024 and 5% in 2023.
The report further mentioned that The Tax Cuts and Jobs Act (TCJA) of 2017 also played a significant role in boosting dividends and share buybacks in 2018. By lowering the corporate federal tax rate from 35% to 21%, the legislation contributed to a surge in shareholder returns, with buybacks and dividend payouts reaching multi-year highs the following year. As the TCJA approaches its expiration in 2025, discussions around corporate tax reductions have resurfaced. While the proposed decrease from 21% to 15% is not as substantial as the previous cut, it could still provide an upside for shareholder returns within the broader market once a final decision is reached.
Companies with a history of regular dividend payments are generally seen as stable investments, reflecting their strong cash flow and financial resilience. These businesses are often found in defensive sectors such as consumer staples, utilities, and healthcare, which tend to be less affected by economic fluctuations. As a result, they help investors manage portfolio risks more effectively. At the beginning of 2025, growing concerns over rising inflation and sluggish economic growth led investors to increase their exposure to defensive stocks. This shift in strategy was intended to protect portfolios from potential market volatility linked to these economic uncertainties.
Ned Davis’s Clissold and his team shared their perspective on the situation:
“One would expect that companies that pay dividends are more stable and have lower growth rates. As a result, they should rally less in up markets and decline less in down markets. In other words, they have lower betas than non-dividend-payers. … As a group, dividend-payers have a beta of 0.99 versus 1.11 for nonpayers.”
For this article, we scanned the list of companies that have delivered positive returns in 2025. From that group, we identified dividend companies with strong dividend policies and stable cash positions. We began with a pool of fifty companies, narrowed it down by considering their share price increases, and ultimately selected the top 14 dividend stocks with the highest share price gains as of March 7, arranging them in ascending order of performance.
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Year-to-Date Return as of March 7: 13.84%
An American multinational telecommunications company, Verizon Communications Inc. (NYSE:VZ) ranks ninth on our list of the best performing stocks that pay dividends. The company is currently advancing its "AI Connect" initiative, which offers the necessary infrastructure and connectivity solutions for businesses to deploy and manage AI workloads. This effort is aimed at capitalizing on the expanding AI infrastructure market, which is expected to attract over $1 trillion in investments over the next decade. The initiative leverages the company’s existing fiber network and edge computing capabilities. As of the fourth quarter of 2024, it had already secured a $1 billion deal pipeline, with major players like Google and Meta utilizing Verizon Communications Inc.'s (NYSE:VZ) network for AI workloads.
Verizon Communications Inc. (NYSE:VZ) delivered solid fourth-quarter results in 2024, posting $35.7 billion in revenue, a 1.6% year-over-year increase. Growth was fueled by higher customer additions across both mobile wireless and internet services. In the mobile wireless segment, net postpaid phone subscriber additions reached 568,000, up from 449,000 in the same period last year. Revenue from this segment grew 3.1% year-over-year to $20 billion, marking its 18th consecutive quarter of expansion.
Verizon Communications Inc. (NYSE:VZ) has garnered investor interest due to its strong cash flow and focus on innovation. In fiscal 2024, the company reported $37 billion in operating cash flow, while free cash flow increased to $19.8 billion from $18.7 billion in the prior year. It offers a quarterly dividend of $0.6775 per share and has a dividend yield of 5.88%, as recorded on March 7. VZ's dividend growth streak currently spans over 18 years.
Overall VZ ranks 9th on our list of the best performing dividend stocks to buy now. While we acknowledge the potential for VZ as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than VZ but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article is originally published at Insider Monkey.
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