There Are Only a Handful of S&P 500 Stocks That Yield Over 5%. Here's My Top Pick to Buy in September.

Verizon is highlighted as an income holding with a 5.7% forward dividend yield, exceeding the 5.25% yield on 30-year U.S. Treasuries, and a 19-year consecutive dividend-increase record. The company serves nearly 147 million wireless devices and about 350,000 broadband customers, supporting the article's view of durable cash flow. The stock trades at roughly 10x expected annual earnings, although saturated wireless markets limit capital-gains potential and position it primarily as a dividend-growth investment.

Analysis

VZ’s equity-income premium is too thin versus duration-matched Treasuries to justify ownership on yield alone. The investable question is whether wireless pricing, churn and capex can produce dividend growth plus sufficient deleveraging to narrow its persistent valuation discount; absent that, a 5%+ government yield remains a formidable substitute for marginal income capital. The stock is more exposed to a higher-for-longer rate regime through refinancing costs and its equity-duration profile than the article implies.

Near term, the relevant catalyst is postpaid service-revenue and EBITDA guidance, not subscriber scale. A disciplined industry pricing environment—particularly from T-Mobile (TMUS) and AT&T (T)—would support ARPU and free-cash-flow conversion over the next 1-3 quarters, while renewed handset promotions or fixed-wireless access price competition would quickly erode the thesis. Watch quarterly wireless service-revenue growth, churn, FCF after spectrum/capex, and net-debt-to-EBITDA trajectory; any dividend increase unsupported by leverage improvement should be treated as defensive signaling rather than value creation.

The contrarian case is that VZ is a bond proxy with embedded downside if long yields rise further: its apparent low multiple may be structurally appropriate for low organic growth, capital intensity, and spectrum obligations. Conversely, a sustained Treasury-yield decline or credible FCF outperformance could drive multiple expansion disproportionately because the shareholder base is income-oriented and valuation expectations are already depressed. NFLX and NVDA references have no actionable read-through.

Key Decisions for Investors

• No outright VZ long solely for income at current Treasury yields; require a 75-100bp yield premium to the 30-year Treasury or evidence of two consecutive quarters of FCF/leverage improvement before adding.
• For a 3-6 month defensive telecom expression, prefer a market-neutral pair: long VZ / short TMUS in equal dollar amounts if VZ’s valuation discount widens without a corresponding deterioration in service-revenue growth. Target 10-15% relative return; exit if VZ churn rises materially or TMUS sustains superior ARPU growth.
• Use VZ as a rates-sensitive watch item: if the 10-year Treasury declines by 50bp while VZ reaffirms annual FCF and dividend coverage, buy a 6-12 month call spread rather than common stock to capture rerating while limiting telecom-specific downside.
• Set a downside trigger at any guidance cut to wireless service revenue, EBITDA, or FCF, or leverage moving higher year-over-year; in that scenario, reduce VZ exposure because the dividend-support narrative will not prevent multiple compression.