Verizon raises quarterly dividend 2.6 percent in face of speculation about cash flow
By APThursday, September 2, 2010
Verizon hikes quarterly dividend 2.6 percent
NEW YORK — Verizon Communications Inc. said Thursday it is hiking its quarterly dividend by 1.25 cents, or 2.6 percent, to 48.75 cents per share.
It’s the fourth straight year Verizon has raised its dividend in September. Analysts have questioned the New York-based phone company’s ability to maintain its dividend, given that nearly all of its cash flow comes from Verizon Wireless, which is 45 percent owned by Vodafone Group PLC. For years, Verizon Wireless has been using its cash to pay down debt rather than paying a dividend to its parent companies, which some have interpreted as Verizon’s way of squeezing Vodafone into sell its stake to Verizon.
Verizon executives have dismissed such speculation, saying the dividend is safe.
The dividend will be paid Nov. 1 to shareholders on record as of Oct. 8. Verizon shares were down 24 cents to $30.01 in afternoon trading, giving it an annual dividend yield of 6.5 percent.
