Here are the best high-yield dividend stocks to buy in January.
For investors seeking significant dividend income, there is always a careful line to strike. Blindly chasing high dividend yields can leave you with a portfolio full of underperforming companies. In the end, when the dividend yield is abnormally high, it is usually because the company is having problems and the stock price has fallen. On the other hand, if you ignore dividend yield and only look for high-quality companies, you may build a portfolio that does not generate sufficient returns compared to your financial goals.
However, sometimes stocks with high dividend yields are also quality companies. These are typically companies that fall out of favor for one reason or another, but their underlying businesses remain solid, at least relative to their conservative valuations.
verizon (VZ 0.42%)I believe we are in a rare optimal position to offer investors a high dividend yield along with the stability of a strong business. The company boasts a profitable recurring revenue stream that generates significant free cash flow to cover its high dividend payout.
Let’s take a closer look at why Verizon is the best high-yield dividend stock to buy in January.
Image source: Getty Images.
A Closer Look at Verizon’s Impressive Dividend
With a quarterly dividend of $0.69, Verizon pays an annual dividend of $2.76, giving the stock an impressive dividend yield of 6.9% at current prices.
Additionally, the company’s dividend is increasing, albeit at a more modest pace. The company announced a dividend increase of 1.25 cents per share in September. Notably, this was Verizon’s 19th consecutive year of annual growth.
The dividend increase “is a direct result of the Company’s disciplined financial management and unwavering focus on long-term growth,” management said in the company’s press release announcing the dividend increase.
But is this dividend sustainable? I think so. The company has paid out approximately $11.4 billion in dividends over the past 12 months. Meanwhile, Verizon’s 12-month free cash flow, or cash flow generated from regular operations minus capital expenditures, was just over $21.1 billion. In other words, Verizon is paying out only 54% of its free cash flow as dividends. And its payout ratio (dividends as a percentage of the company’s earnings) is similar, at 58%.
Business growth is slow but that’s okay
Of course, Verizon’s underlying business isn’t great. Actually, you could say it’s a bit boring. Verizon’s third quarter 2025 revenue increased 1.5% year-over-year to $33.8 billion. The primary driver of this growth was a 2.1% year-over-year increase in wireless services revenue. Underscoring the importance of the segment to the overall business, total wireless services revenue in the third quarter reached $21 billion.
today’s change
(-0.42%) $-0.17
current price
$40.13
Key data points
market capitalization
$170 billion
work range
$39.99 – $40.80
52 week range
$37.59 -$47.35
volume
27M
average volume
28M
gross profit
46.08%
dividend yield
6.76%
These results may not send investors off guard, but they are impressive in terms of stock valuation. The stock is currently trading at about 8.6 times earnings and 1.2 times sales. An assessment like this inherently assumes that the status quo is unchanged. So growth beyond the anemic growth Verizon is experiencing today would be the icing on the cake.
Additionally, the iterative nature of Verizon’s business model is impressive. The company’s consumer wireless retail postpaid churn rate was just 1.12% in the third quarter of 2025, and its wireless retail postpaid phone churn rate was just 0.91%. Business stability like this helps explain why the dividend appears sustainable.
Of course, Verizon has risks. The wireless networking business has always been fiercely competitive, so consumers often base their carrier choices on price. Moreover, carriers constantly compete for subsidies on new phones by bundling deals on services like TV streaming, music streaming, and other digital services. If Verizon begins to lose its edge and the volatility increases, investors may need to reexamine the durability of Verizon’s business and question whether its recurring nature is as reliable as investors believe.
Verizon also has a lot of debt on its balance sheet. Total unsecured debt at the end of the third quarter was 5.9 times net income over the past 12 months; net Unsecured debt was 2.2 times adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA). This leverage can help the company see tremendous revenue growth when times are good, but it could be a major headwind if Verizon’s business begins to decline.
Even taking these risks into account, I think Verizon stock is attractive. Ultimately, cheap valuations help price these risks. This stock is probably a good choice for investors looking to increase the income of their portfolio with a reasonably safe, high-yield dividend stock.
