This 6%-Yielding Stock Keeps Raising Its Payout No Matter What the Economy Does

It's hard to find more attractive investments than healthy dividend-paying stocks, because they offer a win-win-win proposition: Over time their stock prices should rise, plus they pay dividends to shareholders regularly, plus those dividends tend to be increased over time, too.

That's a winning combination! Note, too, that these dividend payments tend to keep being made no matter whether the economy is booming or ailing. Here, then, is one attractive dividend payer to consider: Verizon Communications (NYSE: VZ).

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Why Verizon Communications?

Let's start with Verizon's dividend, because it may be the most compelling thing about the stock. It recently yielded a hefty 6%. It's also a growing dividend, though it hasn't been growing super briskly. Over the past five years, for example, it has increased at an average annual rate of 2.4%. The most recent increase, announced in February, was a 2.5% hike.

That modest growth rate may be disappointing, but remember that while other dividend payers may yield, say, 3.5% and be hiking their payouts rapidly, it can still take a while to get to Verizon's current yield of 6%. And Verizon has been upping its payout for 20 consecutive years. Better still, its payout ratio was recently around 67%, meaning that it's only paying out about 67% of its earnings in dividends, leaving plenty of room for further growth.

Here are some more reasons, beyond its dividend yield, to consider Verizon Communications for your portfolio:

• The company is well established, with close to 150 million wireless retail connections and serving 99% of Fortune 500 companies.
• Its beta is low, currently at 0.22%. That should appeal to anyone worried about a looming market crash, because the low beta means Verizon is much less volatile than the overall market. If the market drops by, say, 10%, Verizon's history suggests it might fall by just 2.2%.
• The high dividend yield can help fight inflation.
• It has a new CEO, Dan Schulman, who is turning away from price hikes and focusing on adding value -- while laying the foundation for future growth.
• The company is already performing reasonably well, posting 2.9% year-over-year revenue growth in its first quarter, with non-GAAP (adjusted) earnings per share (EPS) rising 7.6%. Management hiked its full-year adjusted EPS growth guidance from between 4% to 5% to between 5% to 6%. It also reaffirmed its 2026 free cash flow outlook of $21.5 billion or more, which amounts to growth of at least 7%.

Verizon stock isn't for everyone. If you favor fast-growing stocks, look elsewhere. But fast growers can fall harder in market downturns, and in some years, they may not grow much. Verizon delivers 6% no matter whether the market is up or down.

Its stock price will likely grow over time, too. Over the past decade, it averaged 3.2% annual growth, and over the past 15 years, 5.9%. Over the past three years, it's been growing more briskly, averaging 14.8%. So give this stock, and other compelling dividend payers, some consideration.

Selena Maranjian has positions in Verizon Communications. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.