The telecom company Verizon Communications (VZ -0.24%) enjoyed a solid first half of 2025, with its stock up nearly 9%, soundly beating the broader benchmark S&P 500 index, which is up 1%. It's been a difficult last five years for the stock, as the company tries to rejuvenate growth and forge a path ahead.

Verizon is already one of the major players in the mature wireless market. It's in the process of closing a major acquisition and is focused on expanding its fiber optic network. Should you invest $1,000 in the stock today?

The long-term strategy

Verizon struggled to grow operating revenue in recent years. In 2023, full-year operating revenue fell 2.1% year over year. In 2024, it rose 0.6%.

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On the company's third-quarter earnings call, management laid out a plan to double its number of customers with fixed-wireless access (FWA) to a range of 8 million to 9 million by 2028, while also expanding coverage to 90 million households. The Federal Communications Commission (FCC) recently approved Verizon's $20 billion acquisition of Frontier Communications, which will significantly expand the company's fiber internet capabilities, which provide faster internet access.

The company's long-term goal with Frontier is to expand its broadband to 100 million premises, of which 35 million to 40 million will be fiber passings, or locations that can be connected to fiber optic cables running along a main road.

In the first quarter of the year, Verizon grew total operating revenue by 1.5% year over year, while earnings climbed 5.5%. It also had 339,000 net additions to its broadband business, and 308,000 net additions to FWA, bringing total subscribers to 4.8 million. Fiber internet net adds were 45,000.

In 2025, management is guiding for continued growth in wireless service revenue; an increase in adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), and higher growth in postpaid phone net adds than in 2024.

Two advantages with its strategy is that its brand is well known and the company has already achieved crucial scale. Now, it can leverage existing infrastructure and expertise to deploy its new solutions faster.

If you're not impressed, you can at least buy the dividend

Investors can certainly find other companies that are growing much faster than Verizon, but very few will be able to rival its dividend yield, which now tops 6%. Even amid high interest rates over the last few years, this was more attractive than most, if not all Treasury yields.

Verizon has also now increased its dividend for 18 consecutive years, demonstrating a good track record. The company paid over $11 billion in cash dividends in 2024.

In the first quarter of this year, its payout only amounted to about 59% of earnings, while the company's trailing-12-month free cash flow yield of close to 11% easily topped the dividend yield. This provides a good margin of safety for the dividend and should leave room to keep increasing it each year.

Management holds the dividend as the second-most important capital priority behind investing in its business, and they are also focused on paying down debt to keep the company's balance sheet strong.

Overall, Verizon's stock is less likely to beat longer-term returns generated by the broader stock market. But the company is a top dividend stock worth buying because it can comfortably pay and increase its dividend each year, generating more attractive returns than can be found in the bond market.