Verizon vs. AT&T: One Telecom Dividend Is on Shaky Ground

Verizon (NYSE:VZ | VZ Price Prediction) and AT&T (NYSE:T) have both reported full-year results, and the dividend story between them is more nuanced than raw payout numbers suggest. Verizon’s check is larger, but AT&T’s balance sheet is cleaning up faster. Which dividend is actually safer requires looking past the yield.

Verizon Grows Steadily. AT&T Rebuilds With Ambition.

Verizon’s Q4 2024 wireless service revenue hit $19.9 billion, marking the 18th consecutive quarter of sequential growth. The consumer segment drove $27.56 billion in Q4 revenue, up 2.2%, while fixed wireless access revenue surged 51.6% to $611 million as the company pushed toward its target of 8 to 9 million FWA subscribers by 2028.

AT&T’s quarterly results landed with more momentum. Total revenue reached $33.47 billion, up 3.6% year over year, beating estimates. Mobility revenue rose 5.3% to $24.35 billion, and AT&T Fiber now counts 10.4 million connections, up 11.5% year over year. The company has posted more than 1 million AT&T Fiber net adds for eight consecutive years.

The Dividend Math Points in Different Directions

Verizon’s yield sits at roughly 5.7% based on its current price of $48.79 and an annualized dividend of $2.76. The company has raised its payout for 15-plus years, and FY2025 operating cash flow came in at $37.14 billion against $11.48 billion in dividend payments. That looks healthy at the operating level.

After $17.01 billion in capital expenditures, however, the dividend consumed roughly 57% of free cash flow — a figure that warrants attention given $144 billion in total debt and the pending Frontier acquisition.

AT&T’s yield sits near 3.9% at its current price of $28.32. That lower yield reflects the 2022 cut from $0.52 to $0.277 per quarter, a roughly 47% reduction tied to the WarnerMedia spinoff.

The dividend has held at $0.2775 every quarter since Q2 2022 without interruption since. AT&T’s dividend now consumes just 42% of its $19.44 billion in FY2025 free cash flow, a meaningfully lower burden than Verizon’s. The company projects free cash flow of $18 billion or more in 2026, rising to $21 billion or more by 2028.

Leverage and Spending Plans Are the Real Watchlist Items

Verizon’s Frontier deal and CapEx guidance of $17.5 billion to $18.5 billion for 2025 could tighten the free cash flow cushion further. Business wireline revenue fell 8% year over year in Q4 and wholesale revenue dropped 11%. Those secular declines remain entrenched. The consumer wireless engine is strong, but the business segment drag is real.

AT&T is spending aggressively too. CapEx guidance runs $23 billion to $24 billion annually, and the Lumen and EchoStar acquisitions will push net leverage to roughly 3.2x before it declines. Legacy wireline services fell 17.5% in Q4 2025 and are expected to become immaterial by 2029, a transition that carries execution risk.

Why AT&T Looks More Durable on Dividends

Verizon’s payout is larger and has never been cut, but a 57% FCF payout ratio against a $144 billion debt load and an acquisition in progress leaves less margin for error.

AT&T’s dividend already absorbed its restructuring shock in 2022. What remains is a leaner, better-covered payout with a credible path to $45 billion or more in shareholder returns from 2026 through 2028.

Investors who prioritize dividend safety over size will find AT&T’s structure more defensible. Verizon suits income investors who want the higher absolute yield and can tolerate the leverage overhang. Both carry real risk, but AT&T has already taken its medicine.