Verizon’s Vexing Choice?
Cramericans know that the Mad Money host is always keeping his eyes open for stocks with high yields. But investors always need to ask if the dividend will last, because a company may think their money would be better spent somewhere else.
Take Verizon Communications, for instance. VZ offers a 6.5% dividend yield, but the company is expected to invest roughly $17 billion in 2010, the same as it did in 2009, to build out its network. And the capital expenditures could continue to rise given the strength of the smartphone revolution, Verizon’s push into television with FiOS and its ongoing war with AT&T and other cable companies. So maybe building more cell-phone towers, subsidizing smartphones bringing in more cable clients is a better idea than returning profits to shareholders.
What’s the right course of action for Verizon? Cramer brought Chief Financial Officer John Killian onto the show to find out what he thinks. Watch the video for the full interview.
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