[2]This Model Portfolio only includes stocks that earn an attractive or very attractive rating, have positive free cash flow and economic earnings, and offer a dividend yield greater than 3%. Companies with strong free cash flow provide higher quality and safer dividend yields because I know they have the cash to support the dividend. This dividend payment has been supported by VZ’s cumulative free cash flow. VZ’s free cash flow decline came to an end in 2018, after the firm promoted former CTO Hans Vestburg to CEO and halted its value-destroying acquisition strategy. On the flip side, dividends from companies with low or negative free cash flow cannot be trusted as much because the company may not be able to sustain paying dividends.

Source: Forbes December 04, 2019 14:15 UTC