Now, most folks rushing into these techy-whizzing companies aren’t bothered with dividends, you see. They want growth, a rocket ship to the moon! These companies, they gobble up all the cash and stuff it into ‘research and development’ – a fancy way of saying they’re tinkering with things that might, or might not, work. It’s a terribly competitive world, like a scrum of badgers fighting over a particularly plump grub. If they don’t keep inventing, they’ll quickly find themselves with nothing but cobwebs and regrets.
But there are exceptions, a few clever sorts who actually share the spoils. They send a little trickle of income to their shareholders, a pleasant surprise in this age of grasping greed. And some are rather generous, offering more than the measly 1.2% the S&P 500 index coughs up. Let’s have a look at two of these peculiar creatures: Verizon Communications (VZ 0.17%) and Nokia (NOK +3.04%).
1. Verizon
Verizon, you see, is the biggest of the three telephone giants in America. Though ‘biggest’ doesn’t always mean ‘best’. It’s a tight race, a bit like three snails competing in the Grand National. According to some clever chaps at Dow Jones & Company (as reported by Morningstar, naturally), Verizon owns 34% of the market, just a hair behind T-Mobile US‘s 35%, and a bit ahead of AT&T‘s 27%.
But don’t you worry, Verizon is a wily old fox. It might soon snatch back the top spot it held for ages. Their results at the end of January were rather jolly, revealing they’d added a whopping 616,000 new phone customers. That’s far more than last year, and the highest number in a decade! A truly impressive feat, like teaching a badger to waltz.
Verizon isn’t just about phones, you understand. They’re also doing well with other bits and bobs. They added 372,000 new broadband internet customers, and their fancy Fios fiber service added another 67,000. A healthy number, indeed.
All this cleverness helped Verizon grow its income a bit, adding nearly $36.4 billion to its coffers. Earnings per share slipped by a penny, but that’s a mere trifle. Both results were better than the experts expected, which is always satisfying.
For those who like a bit of income, ‘free cash flow’ is the important bit. It’s the money a company has left over after all the expenses are paid – the stuff they can use to pay dividends.
Verizon has a lovely, steady stream of income from its customers, a thick, reliable flow like a chocolate river. It crept up to $20.1 billion last year, more than enough to pay out $11.5 billion in dividends.
With that sort of financial muscle, Verizon has been increasing its dividend for 19 years in a row. And I suspect that streak will continue for quite a while yet. Their current dividend of $0.69 per share is a rather generous yield of 5.5%.
2. Nokia
Some of you youngsters might not remember, but back in the 1990s and early 2000s, Nokia was the king of mobile phones. Their handsets were the phones of choice for many, especially in Europe. A truly magnificent reign, like a benevolent emperor.
But then came the smartphone revolution, spearheaded by Apple and devices powered by Alphabet‘s Android. Nokia couldn’t compete, you see. It was like sending a snail to race a cheetah. So, they adapted, focusing on the unglamorous business of network infrastructure. They also wisely kept a clutch of patents, which is like having a secret stash of gold.
Nokia still specializes in mobile networks, but it’s also pushing into the data center business. The rise of artificial intelligence has created a hot market for data centers, and Nokia’s equipment is in high demand.
Nokia is pinning its hopes on 6G technology. It won’t be a massive leap forward from 5G, more of a refinement. But the mobile industry is fiercely competitive, so any edge is useful.
At the moment, Nokia is treading water. Its two main businesses grew by 2% last quarter. But it spent more on research and development and administration, which hurt its profits. Free cash flow also declined.
Like Verizon, Nokia had enough free cash flow to cover its dividend, which is just over $0.04 per share, yielding 2.4%. Personally, I’m not convinced 6G will be the miracle cure Nokia is hoping for. And the dividend isn’t generous enough to make the stock particularly appealing. But if you’re a believer in 6G, you might find Nokia worth a look.
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2026-03-13 15:23