VZ vs T: What's the Better Long-Term Play?
Key Points
AT&T cut its dividend in 2022, and its stock performance has remained flat since.
Verizon has increased its dividend for 19 consecutive years, but the stock has struggled in the past five years.
Which of these stocks is a better buy for long-term investors?
- 10 stocks we like better than Verizon Communications ›
In a head-to-head battle of telecommunications giants, AT&T (NYSE: T) and Verizon Communications (NYSE: VZ) are two value stocks with solid dividends and ubiquitous brand recognition. So what stock is the better investment for the long term? Let's look at each.
More to the story than recent returns
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AT&T has had a better 2025 than Verizon. The stock is up just under 7% year to date as of market close on Dec. 17. Verizon is only up 2.23% in the same time frame. Over the past five years, however, AT&T stock has increased by almost 9%, while Verizon has decreased by more than 31%.
From a valuation perspective, both Verizon and AT&T trade at very reasonable price-to-earnings ratios, ranging from 7 to 9. The valuations and returns don't tell the whole story, however.
Verizon has a more dependable dividend than AT&T. Verizon's dividend is currently $0.69 per quarter, and the company has increased its dividend for 19 consecutive years. AT&T had to cut its dividend in 2022 and has not raised it since.
Verizon provides greater stability
Additionally, Verizon has a slightly better overall balance sheet, with higher revenue. Both companies carry considerable debt, which is normal for their industry. Verizon is also considered best in class when it comes to 5G networks and reliability, while AT&T is playing catch-up.
Verizon is focused on its subscriber growth strategy and has intense competition, but fewer distractions. Verizon's higher revenue, rising dividend, and network dominance make it a solid long-term investment, especially for value investors.
For these reasons, Verizon is a better long-term play than AT&T.
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Catie Hogan has positions in AT&T. The Motley Fool recommends Verizon Communications. The Motley Fool has a disclosure policy.
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