When it comes to dividend-paying telecom giants, AT&T (T) and Verizon (VZ) have long been investor favorites. Both companies operate massive wireless networks, generate steady cash flows, and offer attractive dividend yields. But in 2025, their investment cases look very different.
These two telecom stocks are widely owned and followed. They are likely core holdings in an awful lot of dividend stock portfolios. Although only one of the two stocks has been in the Cabot Dividend Investor portfolio, I will weigh in with an opinion on the desirability of the two investments right now in deference to the demand I’m sensing from dividend investors.
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Verizon vs. AT&T Stock: Which Is the Better Telecom Stock in 2025?
AT&T (T)
AT&T is America’s third-largest telecom provider, with about a 30% share of the U.S. wireless market. But the company is no longer just a telephone company. Now, it’s a mega media conglomerate. The company’s $85 billion purchase of Time Warner in 2018 got it into the content business; the deal was a colossal failure, as AT&T spun off its media assets from that deal into a new one with Discovery to create a different kind of content giant.
AT&T’s earnings today come from several segments: wireless services, consumer entertainment (including DirecTV, cable, and broadband), business wireline operations, media, and its remaining Latin American wireless and satellite TV holdings.
I’m not a fan of how much focus still sits outside the core wireless business. Conglomerates often end up shedding nonessential divisions to unlock shareholder value, and many of these segments are mature or in decline. Traditional cable TV and fixed phone lines are disappearing fast as streaming and wireless alternatives render them obsolete. Personally, I have no plans to keep cable or a landline — and that reflects the broader trend, with pay-TV subscriptions shrinking year after year.
Media content might sound promising, but the future is uncertain in an industry now dominated by streaming giants like Netflix, Amazon Prime Video, Hulu, YouTube TV, Apple TV+, and Disney+. AT&T’s $85 billion purchase of Time Warner — which contributed to the $152 billion in debt it still has today — only to reverse course three years later, illustrates that misstep clearly. That’s not the mark of a disciplined strategy.
Investors were skeptical of the Time Warner deal from the start, and subsequent performance hasn’t inspired much confidence.
Plus, the company’s profitability has been inconsistent at best over the last few years. That said, AT&T stock is up 26% in the last five years, with the lion’s share of that (21%) coming in the last year.
Even with cash flow growth, AT&T will need every bit of it to service the debt, build a 5G network and pay the dividend (currently yielding 4.3%). Even if everything goes well, it’s hard to see how the company can deliver much in terms of capital appreciation. I wouldn’t rush to sell T stock if I already owned it … but I wouldn’t buy it either.
Verizon (VZ)
Much of what is true about AT&T is also true of Verizon, with one key difference: Verizon didn’t delve as heavily into other businesses as AT&T. It is more focused on the core wireless business, where it has the biggest market share and higher profit margins than AT&T.
Verizon has made big purchases too, most infamously of AOL and Yahoo, both of which it sold in 2021 to Apollo for a mere $5 billion. The difference is that Verizon only shelled out $9 billion for these companies, a far cry from the $130 billion AT&T spent on DirecTV and Time Warner. Verizon also has a hefty debt load, but that is mostly from buying the other half of Verizon Wireless from Vodafone (VOD) years ago.
Verizon also has cable TV and fixed-line businesses that are fading. However, the more honed focus on wireless enables them to do it a little better. And wireless subscriber growth has been much more impressive than AT&T’s. It’s also squeezing out better profits. Like AT&T, it will have to spend most of its cash flow on debt service, building out the new 5G network and paying the dividend, currently yielding a better 6.8%.
As for the stock, it’s actually underperformed AT&T in the last five years (VZ is down 30% in that period), and AT&T’s recent performance has been enough to give it the edge over a 10-year period as well (AT&T has provided a 6.5% return with dividends reinvested over the last decade vs. a 4.5% return for Verizon).
AT&T stock and Verizon stock are both relatively cheap, and both stocks pay solid dividends, but neither is high on the watch list of the Cabot Dividend Investor portfolio. If you want to know what dividend stocks I’m recommending right now, you can click here to subscribe to my Cabot Dividend Investor advisory.
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*This post is periodically updated to reflect market conditions.
