Motley Fool: Communicating a dividend

Verizon Communications (NYSE: VZ), which had a recent market value north of $200 billion, provides telecommunications services to millions of consumers and businesses worldwide. Its recent dividend yield of 5.8% should be enticing to income-seeking investors, along with the fact that the telecom leader has increased its dividend for 19 consecutive years. Management appears to be committed to extending that impressive streak of dividend hikes.

Notably, Verizon’s financial strength is improving. It just had one of its best quarters in years, with nearly 1 million net additions (added accounts minus dropped accounts) to its mobile and broadband services – the most since 2019. For 2026, it expects to double or triple its postpaid phone net additions, increase its earnings per share by 4% to 5% and boost its free cash flow by 7%. Verizon is also at an inflection point. In its fourth-quarter update, CEO Dan Shulman noted that the recent close of its Frontier Communications acquisition was a significant milestone in Verizon’s plan to deliver stronger growth.

The stock may not be a fast grower, but anyone buying at recent levels is likely to enjoy significant dividend income – along with the stock’s price appreciation over time. (The Motley Fool recommends Verizon Communications.)

My dumbest investment

My worst investing mistake was not selling when it should have been obvious that a stock I owned was at a price that was unsustainable. I had several thousand shares that went from around $70 apiece to a high of $310 in a short period of time. Should I perhaps have sold a large portion at that high? Yes! Did I? Sadly, no. I still have most of the stock, now trading in the $50s. – J.R.T., via email

The Fool Responds: While that situation is a painful one, keep in mind that things can be much clearer in hindsight. Making the decision to sell can be tough in real time, especially if the stock’s been a winner in your portfolio. And selling winners can often be a big mistake.

That’s not to say you should never sell: If you lose confidence in a company, do it. And if you still believe in the company but valuation measures like its price-to-earnings (P/E) or priceto-sales ratios are higher than what you think the company can deliver, selling a portion or even your entire position can make sense. As long as you expect the company to keep growing, consider just hanging on.

(Do you have a smart or regrettable investment move to share with us? Email it to TMFShare@ fool.com.)

Ask the fool

Q. Are bonds safer than stocks and therefore better investments? – M.B., Falls Church, Virginia

A. In a sense, bonds are safer because if you buy a low-risk bond and hold it to maturity, you should receive the interest you were promised. And stocks can be quite volatile, with no guaranteed returns.

But over many long periods, stocks have outperformed bonds. Wharton business school professor Jeremy Siegel has studied the history of investments and found that over the 75 years between 1946 and 2021, stocks grew at an average annual rate of 11.3%, versus 5.8% for long-term government bonds (excluding the effects of inflation).

Interest rates matter, too, for bonds that won’t be held until maturity (which could be a period of 30 years). Rates have been quite low for many years now, and many expect them to rise in coming years. When interest rates rise, the values of existing bonds with lower interest rates are likely to drop. Thus, the values of bond mutual funds can fluctuate over time. Such funds often hold a range of bonds to diversify and reduce risk.

To build long-term wealth, favor stocks. But park shorter-term dollars in less volatile places, such as short-term bonds, money market accounts or certificates of deposit (CDs). Many investors like to hold both stocks and bonds, especially as they approach and enter retirement.

Q. What are some easy-tounderstand books on stock investing? – P.A., Middleton, Idaho

A. Peter Lynch’s classics are very readable. So are John C. Bogle’s “The Little Book of Common-Sense Investing: The Only Way To Guarantee Your Fair Share of Stock Market Returns” (Wiley, $27) and “The Little Book That Builds Wealth: The Knockout Formula for Finding Great Investments” by Pat Dorsey (Wiley, $28).