VZ is not alone in this, but paying $2 divi on $1 of earnings and selling at a PE of 40 because it apys a dividend has run its course.
Why not buy AAPL or something else at a PE of 11 and sell a share or two when you need cash?
Those who bought at $49 "for the divi" have already seen the next three years divi go up in smoke!
Send me $1000 and I'll send you back $100 each year (10%)...., that is until I run out of cash .
The dividend only goes up in smoke if you sell or if the dividend is reduced or eliminated. I don't believe that will happen so I will treat the stock as a long term bond which will increase it's dividend periodically. Right now I am receiving over 4% on latest purchase versus less than 1% from the bank.
Some of us bought in the high twenties and low thirties over the last several years and have been doing okay with the increasing dividend. But you could be right and maybe dump them for some low cost pharma's
i would recommend NOT dumping VZ for a cheap Pharma ... just add the pharma to a portfolio ..
a few of them are great and i wouldn't sway one for the other .. besides .. owning both would
start on the path to diversification ... I bought into BMY soon after i got to my long haul position
on VZ and it has done very well ... looks great going forward and also increases the div every
year(tho' not by much ) ... the big PHarma's are still in a transition phase from standard
medication basis to genetic and small molecule drugs ... they are navigating some tricky waters ,
having their cash cows come off patent , while struggling to get approvals for the new stuff ..
the winners will win huge .. the losers will die a slow death ....
just like VZ , amassing that big debt nut to invest in capital equipment and spectrum for the
future ... studying history can help ... back in the 30's (Great Depression) many public
works projects were authorized .. to include building massive hydro electric gen plants , for
which there was little need at the time , same for roads and the Rural E Act ... they all seemed
unnecessary at the time and few , if any could see the logic , yet , once WWII came to a close
and the US experienced phenomenal growth .. the infrastructure was there .... investing is
much about divining what will happen next year and 5 and 10 years out ... garce
I too had a good run from the $20's but bailed in the mid $40's missing the last few bucks. If it gets back to maybe even the mid $30's with decent earnings it'll be worth another shot.
Everything is cyclical and each dog has it's day. Folks holding those long term treasuries "for safety", I think are in for the worse shock. Sort of ironic how the safe hevens so quickly become dangerous. Liking the banks for 2013. Big ones have cleaned out their problems by taking the hits and dumping their junk on the feds. And the new regs will kill the small banks giving the big ones the whole market. And to think where they were a few years ago!