"Verizon paid $11.2 billion in dividends during 2024 against $18.9 billion in free cash flow, producing a 59% payout ratio. That's sustainable but not generous. The company generated $36.9 billion in operating cash flow and spent $18.0 billion on capital expenditures, covering the dividend 1.7 times over. The earnings-based payout ratio sits around 58%, using trailing twelve-month EPS of $4.69 against an annual dividend of $2.72. These ratios are borderline for a mature business."
"Verizon carries $170.5 billion in total debt, producing a debt-to-equity ratio of 1.6x. That's improved from 2.2x in 2020 but still represents a massive obligation. Interest expense nearly doubled from $3.6 billion in 2022 to $6.7 billion in 2024 as rates rose. That's $6.7 billion annually that can't go to dividends or growth. Net debt-to-EBITDA sits at 3.2x, manageable but leaving little room for error if earnings decline. The $20 billion Frontier Communications acquisition adds more debt and capital commitments ahead."
Verizon yields 6.9% and has increased its dividend for 21 consecutive years. Dividend payments totaled $11.2 billion in 2024 against $18.9 billion in free cash flow, producing a 59% FCF payout ratio; operating cash flow of $36.9 billion less $18.0 billion in capital expenditures covers the dividend 1.7 times. The earnings-based payout ratio is about 58% using trailing EPS of $4.69 and a $2.72 annual dividend, leaving limited cushion for aggressive growth. Total debt stands at $170.5 billion with a 1.6x debt-to-equity ratio and net debt-to-EBITDA of 3.2x. Interest expense rose to $6.7 billion in 2024, and a $20 billion Frontier acquisition adds further obligations. Management prioritizes maintaining the dividend with modest increases that barely keep pace with inflation.
Read at 24/7 Wall St.
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