AT&T (T ) and Verizon (VZ ) have been favorites for many dividend investors, but which stock is the better buy? If you only want one telecommunication stock in your portfolio, you might have to choose between these two, which is difficult because both of these companies are members of the Dow 30 and offer investors great yields. Below are seven charts that compare these two telecom companies to help you make the decision that’s right for your portfolio.
*All data as of January 16, 2015.
AT&T Vs Verizon: Sales
Since 2007, AT&T has been consistent with reporting higher revenues than Verizon. VZ obtains about 80% of its revenue from its Wireless segment, while AT&T’s wireless revenue accounts for only 54% of its total revenue. For investors seeking stocks that are able to grow annual revenue, both VZ and T are great picks – but AT&T may be the better choice.
AT&T Vs Verizon: Earnings
Like revenue, AT&T has consistently reported higher earnings than its rival. Both companies obtain the majority of earnings from their wireless businesses. Earnings are a very important factor for many investors. Although both companies saw a decline in earnings in 2011 and 2012, AT&T has been the better stock as far as income.
Learn more about AT&T in The Complete History Of AT&T
AT&T Vs Verizon: Dividend Growth
Both of these companies are great for dividend investors, offering attractive yields and growing dividends. Although both of these companies have been lifting dividends every year, Verizon’s dividend growth tends to be slightly higher than AT&T. Investors seeking dividend growth in a stock will find both of these stocks to be comparable.
AT&T Vs Verizon: Consecutive Dividend Increases
The two companies have shown commitment to dividend investors, but only AT&T can call itself a dividend aristocrat – with a 30-year history of raising its dividend. With Verizon’s seven years of consecutive increases, AT&T clearly wins when it comes to dividend history.
AT&T Vs Verizon: Cash
AT&T may have blown Verizon out of the water with dividend history, but there is no question that Verizon stands out when it comes to its cash pile. VZ is one of the top five companies in the U.S. with the most cash and is a great pick for dividend investors seeking a cash-heavy company.
For more information on corporate cash, check out: 7 Charts to Put Corporate Cash in Perspective
AT&T Vs Verizon: Market Share
AT&T and Verizon have been on top of the wireless industry, with T-Mobile in third place. Verizon has slightly more U.S. market share than AT&T with 38.5%.
AT&T has gained market share for total wireless subscribers, compared to Verizon. Smaller competitor T-Mobile has been losing market share and now holds just 3.4% of the total wireless market share.
For postpaid subscribers, Verizon also holds the largest amount of market share at 41.2%, while AT&T’s market share is about 35%.
AT&T Vs Verizon: Business Segments
While Verizon focuses primarily on its Wireless business, AT&T’s businesses are more evenly balanced. As shown below, both companies obtain significantly more revenue from the Wireless segments.
The Bottom Line
AT&T and Verizon have their strengths and weaknesses in different categories, but are both great dividend stocks for investors. Both of these stocks are among the highest yielding Dow stocks – with AT&T being the highest yielding stock in the Dow.