Better Telecom Stock: Verizon or Rogers Communications?

Verizon Communications (NYSE: VZ) and Rogers Communications (NYSE: RCI) are well-connected telecom companies that are on the rebound. So far this year, Verizon's shares are up more than 11%, and Rogers' shares are up less than 1% after climbing more than 42% over the past year.

Both companies dominate their countries' wireless business with only a handful of real competitors. Verizon shares the U.S. wireless crown primarily with AT&T and T-Mobile US. Rogers controls the Canadian landscape alongside Bell Mobility and Telus. High barriers to entry safeguard their massive infrastructure investments as they continue to spend big on 5G and 6G networks.

Here are two reasons why I like each of these stocks.

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Rogers benefits from its Canadian moat

Steep barriers to entry and a protective regulatory environment shield Rogers from foreign competition. The company gained considerable market share with its $26 billion purchase of Shaw Communications in 2023. The merger effectively transformed Rogers into a national cable and broadband powerhouse, unlocking massive cost synergies and giving it unparalleled cross-selling capabilities across Western Canada. This integration strengthens Rogers' core enterprise and retail internet business.

A high-yield dividend that's secure

Rogers' dividend, at its current share price, yields around 3.83% with a low payout ratio of 15.3%, which means the company has ample cushion to continue to increase the dividend while paying down debt from the Shaw merger.

Operationally, the company's financials remain highly robust. Rogers maintains an exceptional return on equity (ROE) of more than 35% and an operating margin nearing 22%, demonstrating elite capital efficiency.

Despite these strong fundamental metrics, market volatility and rising macroeconomic pressures have pulled the stock price down from its 52-week high. For value-driven investors, this pullback has created an incredibly attractive entry point. Rogers trades at a trailing price-to-earnings (P/E) ratio of roughly 4, a steep discount relative to its historical averages and global peers.

As data consumption surges and the Canadian population expands through immigration, Rogers is positioned to capture long-term demand. Buying the stock now allows investors to acquire a dominant, cash-generating market leader at a bargain-basement valuation while locking in a reliable, well-covered yield.

In the first quarter, Rogers reported revenue of $5.49 billion, up 10% year over year, while earnings per share (EPS) rose 2% over the same period to $1.01.

Verizon has an even better dividend yield

The company is that rare high-yielding dividend stock that is also seeing significant share price growth. The current yield on its dividend is above 6%, and that's fairly secure since the company had $3.8 billion in free cash flow (FCF) in the first quarter, up 5% year over year, and said it expects yearly FCF to improve to $21.5 billion in 2026, up 7% or more.

The company has enough FCF to pay down its debt while still increasing its quarterly dividend for 20 consecutive years, including a 2.5% increase in 2026. The payout ratio, at 67.4%, is higher than Rogers', but still within safety guidelines.

Improving expenses and financials

The heavy financial lifting required to build out its nationwide 5G infrastructure -- including massive C-band spectrum auctions and initial deployment costs -- is largely complete. That means Verizon's capital expenditures are tapering off, giving the company a clearer path to improve its return on invested capital (ROIC).

In the first quarter, the company reported revenue of $34.4 billion, up 2.9% year over year, and EPS of $1.20, up 4.3% year over year. It said it expects capital expenditures of between $16 billion and $16.5 billion this year, down from $17 billion in 2025. The company has significantly improved its consumer postpaid phone net additions, growing them for seven consecutive quarters, reversing prior losses, driven by a highly successful push into fixed wireless broadband and refined pricing tiers.

The stock is trading at roughly 11 times trailing earnings and only nine times forward earnings, which is competitive considering its dominance against its closest competitors.

Not a simple choice

Both stocks are priced competitively, but Rogers shows stronger revenue growth and a safer dividend. Its shares haven't taken off so far this year, but that makes it an attractive buy.

Verizon is an even more enticing stock. While it may not offer the same government protection as Rogers, Verizon's higher yield and long history of dividend increases make it a strong choice for income-oriented investors. Considering that Verizon's growth cycle is likely to take off with fewer capital expenditures, it appears to be the better choice right now.

James Halley has positions in Verizon Communications. The Motley Fool recommends Rogers Communications, T-Mobile US, TELUS, and Verizon Communications. The Motley Fool has a disclosure policy.