Key Points
I sold my shares in Verizon, Target, and Baidu last week.
Verizon is up nearly 25% in 2026, despite a long run of weak revenue growth.
Verizon and Target have long streaks of dividend hikes, but payouts aren't always enough.
- 10 stocks we like better than Verizon Communications ›
I was nervous about my portfolio last week. You were probably a little bit uneasy, too. The best advice when the market is tumultuous is to hold through the volatility. A close second is to make the most of the downticks to add to your high-conviction stocks. Selling at a time like this is a lot lower on the list, but that's just what I did last week.
I sold my positions in Verizon Communications (NYSE: VZ), Target (NYSE: TGT), and Baidu (NASDAQ: BIDU) last week. Sometimes you have to sell in order to buy, but why did I choose these three investments? I have my reasons. I'll share them.
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1. Verizon
I started buying shares of the wireless carrier giant three summers ago. Telcos were out of favor. Big investments in 5G technology weren't translating into growth. Reports started circulating, calling out carriers for the toxicity of lead-sheathed cable they buried underground ages ago.
The dividend was high, with a strong track record of rising. The stock was cheap, in a market that wasn't. Most of all, it felt as if Verizon was in an all-weather industry. Folks aren't going to give up their smartphones. The merger of two rivals three years earlier strengthened pricing power.
But Verizon's financial performance hasn't been impressive. Revenue hasn't topped 6% in annual growth for 16 consecutive years. It hasn't cracked 3% top-line growth in any of the past four years, and the future isn't looking any better. Analysts see 4% revenue growth this year, but falling short of 2% growth in each of the four following years.
The stock chart is diverging from that reality. Verizon stock is up 25% this year, trouncing the market with a 1% decline. The juicy 7% dividend it was sporting at the start of 2026 is now down to 5.6%. I added to Verizon over the past three years like a security blanket, making it the fourth largest holding in my stock portfolio. It stood out in my portfolio as a financial laggard. Now it stands out for its outperformance.
Verizon is the highest-yielding stock in the Dow Jones Industrial Average (DJINDICES: ^DJI). It consistently cranks out double-digit net margins. It has 146.7 million wireless retail connections. With so many stocks I own -- and so many I want to own -- suddenly at more attractive valuations following the market pullback, I needed to sell something to buy something.
2. Target
Target stock is another security blanket I shredded last week. This is another meandering business delivering a chunky yield, with an even longer streak of annual payout increases than Verizon. It also happened to move higher early in the week, when most of the market was going the other way. A momentum investor would reward that kind of strength, but that's not me. I gravitated to the bull's-eye.
Target moved higher despite wrapping its third consecutive fiscal year of declining sales. A new CEO gives the chain hope, but turnarounds take time. The stock remains cheap, with its guidance calling for earnings per share of $7.50 to $8.50 in the year ahead.
Like Verizon, Target stock is up almost 25% in 2026. It's in an odd position of power for a business that has been losing market share. I may be back eventually for Target, but right now it was the means to a different purchase. If I can paraphrase Omar from The Wire, "You come at a Dividend King, you best not miss."
3. Baidu
Finally, we have Baidu. One thing the developer of China's leading search engine has in common with the other two stocks I sold last week is that they have all posted weak growth in recent years. Baidu has posted negative revenue growth in three of the past four years.
Another thing it has in common is strong recent returns. Baidu is trading slightly lower in 2026, but it's crushing the market with its 35% surge over the past year. The market has warmed up to Chinese tech leaders, as the world's second largest economy turns to homegrown companies to drive the next wave of AI growth, Despite its lack of growth, Baidu has been toiling away with machine learning and AI before they were cool.
I still decided to cut my piece of Baidu loose last week. Analysts see Baidu resuming single-digit revenue growth starting this year, but profit targets through at least the next two years have been moving lower. I turned to Baidu for international diversification, but there's no shortage of companies overseas that are growing faster.
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Rick Munarriz has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Baidu and Target. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
