Key Points
-
SpaceX wants its Starlink business to be a top phone carrier in the near future.
-
Verizon’s CEO Dan Schulman says his company will compete “ferociously.”
-
The telecom stock has been struggling lately due to concerns about SpaceX’s competitiveness in the mobile market.
-
Many telecom stocks have been under pressure this year, as investors worry about the threat that Space Exploration Technologies Corp (NASDAQ:SPCX) poses to the industry.
Verizon Communications (NYSE:VZ) is a prime example of that. While it posted strong results this year, which initially sent its stock soaring, it’s been going in the opposite direction in recent months, with SpaceX CEO Elon Musk making it known that the company plans to turn its Starlink business into a major mobile carrier.
Missed AI’s “Act 1”? Act 2 Could Be 15x Bigger. Most investors think they missed the AI boat because they didn’t buy Nvidia in 2005. But according to our analysts, we’re only at the end of “Act 1″—the R&D phase. “Act 2” is the global rollout. Continue »
But that doesn’t mean it’s going to be a cakewalk by any stretch. And Verizon’s CEO has made it clear that the telecom giant isn’t just going to hand over market share.
Why it may not be easy for Starlink to become a major player
Verizon CEO Dan Schulman has been fielding questions about the risk from SpaceX on the company’s recent earnings call, as that’s been top of mind for many analysts and investors of late. Schulman estimates that for SpaceX to truly compete, it’ll need to build out a significant terrestrial network, which will take several years and cost hundreds of billions of dollars.
Schulman also warns that the experienced telecom provider will protect its business and compete aggressively if Starlink goes for market share in the mobile market; it won’t be easy. “Frankly, at that point, I welcome the opportunity to compete against them. It’s very hard to throw a punch against something that doesn’t exist, but once they come into the market, we will be ferociously competitive.”
Verizon may be one of the best dividend stocks to buy right now
While the market obsesses over the SpaceX threat, Verizon continues to chug along and post solid numbers. It reported solid third-quarter earnings last week, with postpaid phone net adds being the best they’ve been in five years. And its quarterly net account growth was the highest it’s been in more than a decade.
Verizon’s business is performing incredibly well, and yet many investors are fearful of owning the stock due to the SpaceX risk, which could prove to be a big mistake in the future. Trading at just eight times its estimated future profits, based on analyst expectations, it’s an incredibly cheap stock to own. Plus, it offers an exceptionally high yield of 6.3%.
When the market overreacts like this, it can be an excellent time to buy a quality stock like Verizon at a great price. Investors seeking a high payout without taking on much risk should consider this top dividend stock today.
Should you buy stock in Verizon Communications right now?
Before you buy stock in Verizon Communications, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Verizon Communications wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $334,793!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,257,420!*
Now, it’s worth noting Stock Advisor’s total average return is 874% — a market-crushing outperformance compared to 209% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of November 2, 2026.
David Jagielski, CPA has no position in any of the stocks mentioned. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.
