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2 Dividend Stocks Down Between 10% and 16% to Buy Right Now

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  Published in Stocks and Investing on Friday, October 24th 2025 at 17:40 GMT by The Motley Fool
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Dividend‑Diligence: Two Stocks With 10‑16% Price Drops Are Now Worth a Second Look

In the bustling world of dividend investing, a recent MSN piece highlights two high‑yield names that have slipped 10 % to 16 % in the past month, prompting analysts to recommend them as “buy” opportunities for those seeking regular income and upside potential. The article focuses on Verizon Communications Inc. (VZ) and Consolidated Edison, Inc. (ED)—two blue‑chip utilities that have shown resilience amid market turbulence yet faced temporary setbacks.

Verizon Communications (VZ)

Verizon, a telecommunications giant, sits at the intersection of declining traditional voice traffic and rising data demand. The MSN article explains that the share price fell from $34.15 to $29.10—roughly a 14 % decline—after a 0.8 % drop in earnings per share (EPS) for the most recent quarter. Despite this, Verizon’s dividend yield remains an attractive 5.7 %, with a payout ratio of 69 % that comfortably exceeds the industry average of 58 %.

Key points highlighted:

• Stable Cash Flow: Verizon continues to generate more than $10 billion in operating cash flow, giving it the buffer to maintain its dividend even through temporary earnings dips.
• 5G Rollout: The company’s investment in 5G infrastructure is projected to deliver incremental revenue streams in the coming years, offsetting any short‑term headwinds.
• Regulatory Landscape: The article references a recent FCC report that is expected to streamline network sharing agreements, potentially reducing operational costs for Verizon.

The piece also underscores that the 14 % price decline is a “rebalancing” move for over‑valued shares, setting the stage for a rebound as the company hits its fiscal targets.

Consolidated Edison, Inc. (ED)

Consolidated Edison, often referred to as “ConEd,” operates as a regulated electric and gas utility serving the New York City area. The article reports a 10 % drop in ED’s share price—from $94.78 to $84.85—primarily driven by a marginal dip in quarterly revenue and a one‑period decline in net income. Nevertheless, its dividend yield sits at an eye‑catching 4.8 %, with a payout ratio near 80 %, which is sustainable given the utility’s strong dividend coverage ratio of 6.4.

Highlights from the article:

• Regulated Revenue Stream: ED’s earnings are largely governed by New York State’s regulatory framework, offering predictability that helps maintain dividends even in volatile market conditions.
• Infrastructure Investment: The company is allocating $2 billion toward renewable energy projects, which will not only bolster long‑term growth but also enhance its ESG credentials.
• Interest Rate Environment: With the Federal Reserve’s recent shift toward higher rates, ED’s debt costs have risen, contributing to the recent earnings dip. The article notes that the company’s debt-to-equity ratio is still moderate at 1.9, mitigating risk.

The article also draws attention to a scheduled “rate‑setting meeting” by the New York Public Service Commission, where a potential rate increase could provide a boost to future cash flows and help sustain dividend levels.

Why the Drop Is Not a Red Flag

Both Verizon and ConEd are positioned within industries that have a history of delivering consistent dividends regardless of broader market swings. The MSN article cites research from Morningstar that shows a strong inverse correlation between dividend sustainability and short‑term share price volatility in the utility sector. This means that even though the shares have fallen 10‑16 %, the underlying fundamentals—robust cash flow, low leverage, and favorable regulatory environment—suggest these are temporary price adjustments rather than signals of long‑term decline.

Tactical Takeaways for Income Investors

1. Dividend Yield Focus: Investors looking for immediate income may find Verizon’s 5.7 % yield and ConEd’s 4.8 % yield particularly appealing compared to the broader S&P 500 dividend yield of 1.5 %.
2. Rebalancing Strategy: The article recommends buying on dips, especially for dividend investors who are willing to hold a position for 12‑18 months to ride out short‑term volatility.
3. Risk Assessment: Both companies maintain a low to moderate price‑to‑earnings (P/E) ratio (Verizon: 15.2, ConEd: 12.7) relative to their peers, indicating that the market undervalues them at current price levels.
4. Long‑Term Outlook: With continued investment in 5G and renewables, Verizon could capture new revenue streams, while ConEd’s rate‑setting meetings provide potential for earnings growth.

Bottom Line

The MSN piece paints a clear picture: despite a 10‑16 % price decline, Verizon Communications and Consolidated Edison are still solid dividend plays. Their robust cash flows, low payout ratios, and favorable regulatory frameworks make them attractive targets for income‑focused portfolios. For investors who are comfortable with short‑term price swings, these stocks offer an opportunity to enter at a discount, reap attractive yields, and potentially benefit from the companies’ continued growth trajectories.