Telecom stocks such as AT&T (NYSE:T) and Verizon (NYSE:VZ) often serve as core holdings for income investors who have a low tolerance for risk, especially retirees living off dividends.
That makes sense because many telecom companies enjoy large, recurring streams of cash flow that support generous and slowly growing dividend payouts over time.
However, not all telecom giants make for good dividend investments. The industry is increasingly battling slow growth and increased competitive pressures, and some firms are better positioned than others.
Let's take a closer look at Vodafone Group (NASDAQ:VOD), one of the world's largest telecom behemoths, to see if its 5.7% dividend yield is safe and appealing for our Conservative Retirees dividend portfolio, or if the company could be a value trap.