Verizon vs AT&T Which Should You Buy?

Verizon and AT&T are two telecommunications giants that have been competing in the stock market for years. Both companies offer a range of services including wireless communications, internet, and television. While Verizon has a larger market share in the wireless sector, AT&T has diversified its offerings through acquisitions like WarnerMedia. Investors closely monitor the performance of these stocks, considering factors such as subscriber growth, technological advancements, and regulatory changes. The competition between Verizon and AT&T continues to drive innovation and growth in the telecommunications industry.

Verizon or AT&T?

When comparing Verizon and AT&T, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Verizon and AT&T.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Verizon has a dividend yield of 6.35%, while AT&T has a dividend yield of 4.75%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Verizon reports a 5-year dividend growth of 2.02% year and a payout ratio of 114.26%. On the other hand, AT&T reports a 5-year dividend growth of -11.11% year and a payout ratio of 90.45%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Verizon P/E ratio at 18.13 and AT&T's P/E ratio at 18.58. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Verizon P/B ratio is 1.84 while AT&T's P/B ratio is 1.64.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Verizon has seen a 5-year revenue growth of 0.00%, while AT&T's is -0.32%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Verizon's ROE at 10.33% and AT&T's ROE at 8.72%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $42.04 for Verizon and $23.36 for AT&T. Over the past year, Verizon's prices ranged from $37.14 to $45.36, with a yearly change of 22.13%. AT&T's prices fluctuated between $15.94 and $24.03, with a yearly change of 50.75%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.