Is It Time To Take Profits From Verizon Communications?
The U.S. telecommunications or "telco" industry is largely a duopoly with the two major players being AT&T (NYSE:T) and Verizon Communications (NYSE:VZ). The telco sector has typically been a safe haven of sorts for investors due to the stable nature of the companies and of course the high current yield.
Verizon has long been a favorite for dividend growth investors for that very reason. With an 11 year dividend growth streak and plenty more to come, Verizon has earned the title of Dividend Contender.
Since initiating a position in Verizon just over 2 years ago I've been more than happy with the results. I've received over 7% of my investment back in cold hard cash and generated over a 9% rate of return. Even better is the two dividend increases that have grown my income by 6.6% at a time when cumulative inflation, according to US Inflation Calculator, has amounted to just 0.2%.
However, after reaching an intraday low of $43.79 on January 20 Verizon Communications share price has since increased over 23% to Friday's closing price of $54.02. The rapid share price appreciation has led me to question whether I should consider taking some profits.