Key Takeaways
- Verizon yields 6.8% after an 8.7% drop on Oct. 9 and Edison International yields 6.5%, and both trade at 9x forward earnings or less.
- Edison’s dividend grew 5.4% a year from fiscal 2020 to fiscal 2025, nearly three times Verizon’s 1.9%.
- Verizon’s dividend takes 54% of its free cash flow, trailing and forward. Edison pays out 51% of its fiscal 2025 normalized EPS and 57% of 2026 consensus.
- Edison’s forward P/E of 9x is well below its five-year average of 13x, after California’s wildfire-liability bill died on Aug. 31.
Any investor hunting for a 6%+ yield is going to run into Verizon Communications (VZ) and Edison International (EIX). Both pay it, and both trade at 9x forward earnings or less, so the market isn’t paying up for either one.
But their dividends are moving at very different speeds. So which is the better high-yield dividend stock? Here’s how they stack up…
| Metric | Verizon (VZ) | Edison International (EIX) |
|---|---|---|
| Dividend yield | 6.8% | 6.5% |
| Yield at the current dividend rate | 6.80% | 6.35% |
| Dividend growth, fiscal 2020 to fiscal 2025 | 1.9% a year | 5.4% a year |
| Coverage, last reported | Cash dividend payout ratio: 54% (TTM to June 30, 2026) | Payout ratio of normalized EPS: 51% (fiscal 2025) |
| Coverage, forward (fiscal 2026 consensus) | Cash dividend payout ratio: 54% | Payout ratio of normalized EPS: 57% |
| Net debt/EBITDA (LTM) | 3.35x | 4.0x |
| Interest coverage (LTM) | 4.36x | 3.08x |
Verizon’s dividend is well-covered and barely growing
Management said on its first-quarter call: “This marks the 20th consecutive year of dividend increases, a track record we’re extremely proud of.”
That check is well-covered. It took a comfortable 54% of free cash flow over the twelve months to June 30, 2026, and the same 54% on fiscal 2026 consensus. Free cash flow has topped the dividend in every fiscal year since 2018, and fiscal 2022 was the tightest year, at 77%.
The catch is the dividend’s growth. It rose just 1.9% a year from fiscal 2020 to fiscal 2025, from $2.48 to $2.73 a share, while net debt sits at 3.35x EBITDA. Management’s line on the second-quarter call covers both: “We are growing our dividend, and we are paying down our debt.”
The newest risk is competition. SpaceX agreed on Oct. 8 to buy nationwide low-band spectrum for its Starlink phone service, and Verizon’s stock fell 8.7% the next day. The deal still needs the FCC’s approval, and Verizon says spectrum alone “does not provide the network or infrastructure to offer true nationwide coverage.” It’s a threat to the business behind the dividend, not yet a dent in its cash.
Edison’s dividend grows faster, at a wildfire discount
Edison’s dividend has grown much faster than Verizon’s: 5.4% a year from fiscal 2020 to fiscal 2025, from $2.58 to $3.36 a share. The board raised it another 6% in December, to $3.51 a year, and management says it has “a commitment to the dividend.”
Edison funds its capex with new debt and stock, so it’s judged on its payout ratio of normalized EPS. That ratio has run from 50% to 64% since fiscal 2016, while the dividend rose every year from $1.98 to $3.36.
Fiscal 2025’s normalized EPS of $6.55 was a big jump from fiscal 2024’s $4.93, so the forward 57%, on analysts’ $6.12 for fiscal 2026, is the better guide. It sits inside management’s core EPS guidance of $5.90 to $6.20.
The catch is California’s wildfires, and that risk has grown since Edison’s July call. On Aug. 4, the Los Angeles County Fire Department found that arcing on an out-of-service Southern California Edison tower started the Eaton Fire. On Aug. 31, the state’s wildfire-liability bill died without a vote, and Edison’s stock fell 23% that day. On Sept. 16, Fitch moved its outlook to negative, warning that “future rating downgrades are likely.”
So which dividend wins?
Verizon is the better high-yield dividend stock. Edison’s dividend grows faster, but the risk behind it got bigger this summer.
Put $10,000 into each, and Verizon pays $680 a year to Edison’s $650. At each company’s 5-year growth rate, Edison’s income would pass Verizon’s around 2028, and in year 10 it would pay about $1,046, a 10.5% yield on your cash, against about $808 for Verizon.
That math assumes a decade of Edison raises with its wildfire liability unsettled. Edison had recorded $1.6 billion of Eaton Fire settlement losses by June 30, and it calls more material losses probable, with no estimate yet. The market is pricing that in.
Edison trades at 9.0x forward earnings. That’s well below its five-year average of 13.0x and not far above its 8.0x low of June 2025. Verizon trades at 8.2x since its fall, so its check is the cheaper one too.
This isn’t to say Edison’s dividend is in trouble today: it pays out 57% of fiscal 2026 consensus normalized EPS. It’s just that Verizon’s check takes 54% of free cash flow, with less debt and better interest coverage behind it, and no wildfire can touch it.
Of course, Edison’s case could come back fast. If Sacramento delivers the “durable and financeable framework” CEO Pedro Pizarro is pushing for, its faster raises would come without the cloud. Its December dividend decision is the next test.
So what is Verizon stock actually worth?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
