According to Dividend Channel, in trading on Tuesday, shares of Verizon Communications Inc (VZ) were yielding above the 6% mark based on its quarterly dividend (annualized to $1.95), with the stock changing hands as low as $32.28 on the day. Dividends are particularly important for investors to consider, because historically speaking dividends have provided a considerable share of the stock market's total return. To illustrate, suppose for example you purchased shares of the S&P 500 ETF (SPY) back on 12/31/1998 — you would have paid $123.31 per share. Fast forward to 12/31/2010 and each share was worth $125.75 on that date, a mere $2.44 or 2% increase over all those years. But now consider that you collected a whopping $20.53 per share in dividends over the same period, increasing your return to 18.6%. Even with dividends reinvested, that only amounts to an average annual total return of about 1.4%; so by comparison collecting a yield above 6% would appear considerably attractive if that yield is sustainable. Verizon Communications Inc (VZ) is an S&P 500 company, giving it special status as one of the large-cap companies making up the S&P 500 Index.
In general, dividend amounts are not always predictable and tend to follow the ups and downs of profitability at each company. In the case of Verizon Communications Inc, looking at the history chart for VZ below can help in judging whether the most recent dividend is likely to continue, and in turn whether it is a reasonable expectation to expect a 6% annual yield.
VZ operates in the Communications Services sector, among companies like PT Indosat Tbk (IIT) which is off about 2.3% today, and China Mobile Limited (CHL) trading lower by about 0.6%. Below is a three month price history chart comparing the stock performance of VZ, versus IIT and CHL.