Verizon Just Signed a More Than $1 Billion Dark Fiber Deal With Google. Here's What It Means for the 6.3% Dividend.
Yahoo Finance ·
Verizon ( VZ +5.72% ) reported second-quarter results on Friday morning, July 24, and the numbers themselves gave income investors plenty to like. But the most interesting disclosure came on the earnings call. CEO Dan Schulman said the telecom giant has signed an agreement worth more than $1 billion to supply dark fiber to Google, the search and cloud company owned by Alphabet , which will use it to connect its data centers. Dark fiber is fiber-optic cable that the customer leases and lights up with its own equipment, giving it dedicated capacity between facilities. And demand for it is coming from exactly the customers with the deepest pockets in the market right now: companies building out data centers for AI (artificial intelligence) . Meanwhile, at about $46 per share, the stock's dividend yield sits near 6.3%. This makes it a great dividend stock for income. So the question for income investors is whether a new AI infrastructure revenue stream changes the case for owning a high-yield telecom. I think it does, and in the right direction.
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