Verizon (VZ) Stock Drops on Dow Exit — Is That 6% Dividend Worth Holding For?

TLDR

• Verizon will be removed from the Dow Jones Industrial Average on June 29, replaced by Alphabet (GOOGL), sending the stock down 2.3% to $45.68.
• Despite the Dow exit, VZ still carries the highest dividend yield among telecoms at 6.1%, with a quarterly payout of $0.7075 per share due August 3.
• Goldman Sachs rates VZ a Buy with a $56 price target, forecasting over 1.17 million net postpaid subscriber additions for the year.
• Verizon’s fiber broadband subscriber count hit 10.8 million in Q1, up 42%, partly boosted by its $20 billion Frontier Communications acquisition.
• Fifth Third Wealth Advisors raised its VZ stake by 64% in Q1, and institutional investors now own 62.06% of the stock.

Verizon Communications dropped 2.3% to $45.68 on Wednesday after the Dow Jones Industrial Average announced it will replace VZ with Alphabet on June 29. It’s the end of an era — no traditional telecom name will remain in the Dow after the swap, following AT&T’s removal in 2015.

Verizon Communications Inc., VZ

The stock opened Thursday at $45.70, with a 12-month range between $38.39 and $51.68.

Despite the headline noise, VZ is still up about 12% in 2026, comfortably ahead of AT&T and T-Mobile, both of which are down around 10% year-to-date.

The Dow exit doesn’t change the math on the dividend. Verizon pays $0.7075 per quarter — $2.83 annualized — for a yield of 6.2%, the highest among U.S. telecoms. AT&T’s yield sits at 5% by comparison. The next dividend goes to stockholders of record on July 10, paid August 3.

Free cash flow of $4.82 per share comfortably covers that $2.83 payout. CEO Hans Vestberg — wait, it’s actually new CEO Dan Schulman, the former PayPal boss — has called the dividend “ironclad,” and the company has raised it for 20 straight years.

Subscriber Growth and the Frontier Bet

Verizon added a net 55,000 postpaid phone subscribers in Q1 — the first positive number in that period since 2013. Schulman has simplified the plan lineup and improved customer service, and Wall Street is taking notice.

Goldman Sachs analyst Michael Ng rates VZ a Buy with a $56 price target, implying 23% upside from current levels. He expects net postpaid additions of more than 1.17 million for the full year, above the company’s own 750,000–1 million forecast.

The broader analyst picture is more mixed: 12 Buys, 17 Holds, and a consensus price target of $51.89, per FactSet. That still implies about 13% upside.

Earnings forecasts have been creeping up. The consensus 2026 EPS estimate is now $4.95, up from $4.79 at the start of the year, with the company guiding $4.95–$4.99. Verizon beat Q1 estimates, posting $1.28 EPS against a $1.21 consensus on revenue of $34.44 billion, up 2.7% year-over-year.

Fiber broadband subscriber count grew 42% to 10.8 million in Q1, including about 2 million from the $20 billion Frontier acquisition closed in January. Fixed wireless also grew 24% to 6 million customers.

Institutional Money Is Moving In

The Frontier deal added debt, but Verizon says it has paid down roughly half of the acquisition-related debt and remains on track to hit leverage targets in 2027, with $1 billion in expected cost synergies by 2028.

Fifth Third Wealth Advisors boosted its VZ stake by 64% in Q1, bringing its position to 164,082 shares worth $8.24 million. Several other institutions also added positions. In total, 62.06% of VZ is now held by institutional investors.

Verizon also bought back $2.5 billion in stock in Q1 and plans another $500 million in repurchases later this year.

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