Investors focused on income looking for reliable dividends and a stable company may consider investing in a telecom giant Verizon.
The disciplined financial management of AT&T supports its solid yield of 4.1% dividend.
Abbvie’s ability to thrive after Humira, combined with a 53-year history of dividend growth, makes it an intelligent purchase now.
10 shares we like better than Verizon Communications ›
It was a variable year for US markets, with many shares experiencing impressive maximums and sharp low levels. Investing in such a tumultuous environment can feel discouraging for retail investors.
However, dividend stocks can help generate significant passive income even against the background of market fluctuations. With the right elections, investors can generate a stable dividend income even with a relatively modest investment.
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For example, investing 2000 dollars each in Verizon Communications(Nyse: vz)., AT&T(Nyse: t)and Abbvie(Nyse: abbv) will generate a total of $ 282.60 passive income annually. Here’s how dividend income breaks down:
With 6.5% yield, $ 2,000 invested in Verizon will generate $ 130.20 in annual dividends.
With a yield of 4.1%, $ 2,000 invested in AT&T will generate $ 82.40 in annual dividends.
With 3.5% yield, $ 2,000 invested in Abbvie will generate $ 70 annual dividends.
These shares are not only reliable dividend payments, but they are also proud of strong business models and a rich and lasting history of the return value of shareholders.
The communication giant Verizon offers investors a sustainable 6.5% dividend yield, which means $ 2.71 a year per share, all supported by solid business foundations. It has raised its dividend for 18 consecutive years.
Verizon’s strong financial results emphasize the stability of her dividend policy. The company brought its highest quarterly adjusted profit before interest, taxes, depreciation and depreciation (EBITDA) of $ 12.6 billion in the first quarter of the fiscal 2025 (ending March 31). The free cash flow was $ 3.6 billion. With a dividend payment factor of 64.2%, there are enough profits to cover the dividend.
The company’s convergence strategy that integrates its wireless and wire networks (including 5G and optical networks) to create complete connectivity solutions have proved successful. This has helped reduce customers by 40% to 50% for both mobility and fiber products. The sticky customer base becomes predictable cash flows.
In addition to preserving existing customers, the company also quickly acquires new customers. Verizon added 339,000 broadband customers and 308,000 fixed wireless customers in the first quarter. The company aims to achieve a goal of 100 million fiber rooms and fixed wireless access after the end of its waiting borderline acquisition.
In addition to telecommunications services, Verizon has built a stable business for adjacent services (including discounted streaming services and other subscriptions, insurance and financial services), which is expected to hold an annual rate of $ 2 billion by the end of 2025. Business can boast the margins of the mid-30s.
The management leads 2% to 3.5% adjusted EBITDA growth and free cash flows from $ 17.5 billion to $ 18.5 billion in 2025. This provides the necessary pillow for dividend resistance.
Therefore, for investors who want to earn passive income from high quality companies, Verizon seems to be an intelligent purchase now.
The AT&T telecommunication giant offers a solid yield of 4.1%, which means $ 1.11 per share a year. The dividend also looks well covered with a 68.1%dividend payment ratio, which means that the company also has the flexibility to increase dividends in the coming years. AT&T expects to resume buying shares in the second quarter of the fiscal 2025 as part of a $ 10 billion redemption program, with at least $ 3 billion being completed by the end of the fiscal 2025, and the rest is allocated for a fiscal 2026.
AT&T is also increasingly focusing on financial discipline. Since 2020, the company has reduced its net debt by $ 32 billion. It ended the first quarter of the fiscal 2025 with a net EBITDA with a debt to EBITDA debt of 2.63, lower than the ratio of 2.68 at the end of the fiscal 2024. Through the Q1 company, the liberties increased to $ 30.6, the net income increased by 23.6 to 23.6 By 23.6% to $ 3.1 4.7 billion, and free cash flow increased by 2.7% in the year to $ 3.1 billion. These numbers demonstrate AT&T’s ability to fund its dividend policy, while maintaining sufficient financial flexibility to invest in growth and redemption initiatives.
AT&T also has exceptional fiber and wireless fiber companies, both of which are relatively resistant to recession. The company currently operates the largest fiber network in the United States and expects to hit 30 million seats on the fibers by mid-2025 and 50 million by 2029. This expansion already leads to strong customer growth, with 261,000 net additives in Q1 alone. In addition, the modernization of the company’s wireless network and fixed wireless expansion has contributed to an increase in the number of customers from 181,000 through Q1.
AT&T also takes advantage of grouping its services, creating easier and more baked customer relationships. AT&T Fiber and Wireless Services have 15% higher life values than independent customers.
For income investors seeking dividend defensive growth, this transformed telecommunications player is an attractive choice now.
Abbvie also offers an impressive 3.52% yield with an annual payment of $ 6.56 per share. With its history of dividend increase over 53 consecutive years (including its Abbott Laboratories Inheritance), Abbvie sports the prestigious status of Dividend King.
When Abbvie lost patent protection for his blockbuster immunology drug Humira in 2023, many investors were concerned about the sustainability of their dividend policy. However, the company has successfully reduced the Humira’s over -protection and continues to flourish even after the dreaded patent rock.
Humira sales fell more than expected, decreasing by 49.5% compared to a year to $ 1.1 billion through the Q1 of the fiscal 2025. However, the next -generation Skyrizi and RinvoQ immunology medicines generate combined $ 5.1 billion. Management now expects these two medicines to generate $ 31 billion in combination sales by 2027, exceeding Humira peak sales of $ 20.7 billion.
In addition to immunology, Abbvie has successfully diversified into areas such as neuroscience, oncology and aesthetics. The company also focuses on strategic investment, including a $ 350 million obese partnership with GUBRA and plans to acquire $ 2.1 billion to Car-T Therapy Capstan Therapeutics developer. These deals will position Abbvie in several areas of high growth.
Recently, however, Abbvie has announced that the acquired research and development in the process (IPR & D) and the cost of major stages have adversely affected its second -quarter profit guidelines. Although they are a short -term challenge, deals can be the main engines of growth in the long run.
As Abbvie proves its ability to navigate the main patent cliffs as it grows its dividend, I think the shares are worth considering in 2025.
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Malnal Pradhan has no position in any of the mentioned shares. Motley Fool has positions and recommends Abbvie and Abbott Laboratories. Motley Fool recommends Communications Verizon. Motley Fool has a policy of disclosure.
All it takes is $ 2,000 invested in each of these high dividend shares to help generate over $ 280 passive income annually, originally published by Motley Fool
