If You'd Invested $10,000 in Verizon Communications 10 Years Ago, Here's How Much You'd Have Today | The Motley Fool

Bear with me for a second; I'd like to start this overview with a quick history lesson. Verizon Communications ( VZ +1.00%) was a hot tamale in 2015. The telecom giant was on a hot streak in the early days of the smartphone era. If you had invested $10,000 in Verizon stock near the end of 2005, activated the dividend reinvestment program (DRIP), and left it alone for the next 10 years, you'd have a market-beating $27,400 in your pocket. NYSE: VZ Key Data Points The good old days are over But the smartphone frenzy slowed down over the years, though Apple ( AAPL +0.53%) managed to build one of the world's largest market caps around the iPhone. Verizon's soaring sales growth cooled off. Smaller rival T-Mobile US ( TMUS +0.68%) stole millions of Verizon's mobile subscribers. The company continued to generate impressive cash flows despite several rounds of expensive network infrastructure upgrades . But the old magic was gone. If you started a new $10,000 Verizon investment on Dec. 22, 2015, you'd have $4,650 in total returns today for a total value of $14,650. That's better than sticking the cash under your pillow for a decade, but far behind the S&P 500 ( ^GSPC +0.32%) posting a $40,220 total-return value over the same span. Image source: Verizon Communications. So, should you buy Verizon today? Verizon remains a solid dividend stock, fueled by generous cash flows . The dividend yield stands at 6.9% today -- one of the 10 highest yields in the S&P 500. Therefore, the stock may make sense for dividend-hungry income investors , but it seems unable to maintain its value over the long haul. Perhaps I'll change my tune in a couple of decades, as retirement approaches, but I'm not buying Verizon stock today. At this rate, I'm not even sure that Verizon will be a leading telecom competitor in 20 years (or even 10).

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