Verizon shares (VZ) fell nearly 9% on October 9, their worst day since 2002, after SpaceX acquired nationwide spectrum, raising the prospect of a Starlink mobile service. However, the latest quarterly report showed a healthy business: free cash flow rose 12% to $7.8 billion in the third quarter, and management raised its full-year growth forecast to nearly 12%. Verizon pays $0.7075 per share quarterly, about $2.83 per year, yielding roughly 6.5% at about $43.50 per share on October 26; it has raised its payout for 20 consecutive years, and dividends accounted for about 58% of free cash flow over the past year. Verizon also added a net 406,000 monthly phone plan customers, up 820% from a year earlier, and fewer customers are leaving each month. The article argues that SpaceX may win a share of the business but cannot control the whole market, which is already highly competitive given the large retail presence of AT&T and Verizon, and concludes Verizon still looks like a solid long-term income investment.
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