In the converging world of telecom, data and media, there have been some issues over how investors would evaluate the super-high dividends offered to the major telecom players. Verizon Communications Inc. (NYSE: VZ) has in some ways not changed as much with acquisitions of Yahoo and AOL as AT&T Inc. (NYSE: T) with its acquisitions of DirecTV and of Time Warner.

The message from Verizon appears to be an all-clear sign on its dividend. Verizon just announced that it was raising its dividend for the 12th consecutive year.

The prior quarterly dividend of $0.59 per common share will jump to $0.6025. This will create a dividend yield of 4.47% for any new investor getting in at the current share price of $53.89.

Verizon further said that it has roughly 4.1 billion shares of common stock outstanding and that it had made $4.8 billion in cash dividend payments during the first half of 2018. This new dividend hike to $2.41 on an annualized basis will create a dividend liability of $9.88 billion.

AT&T also has been able to keep raising its dividend each year, but the weaker share performance here gives AT&T a much higher current dividend yield than Verizon. AT&T’s quarterly dividend payout of $0.50 per share and $32.05 share price gives investors a current yield of 6.24%.

Verizon has a market cap of $223 billion, versus about $233 billion for AT&T. The payout ratios based on this year’s expected earnings from the Thomson Reuters consensus estimates vary. AT&T’s $2.00 per share payout is expected to be raised soon, but the consensus estimate of $3.51 in earnings per share would imply that the company is paying out about 57% of its normalized earnings as dividends. Verizon’s new $2.41 annualized payout and $4.66 consensus estimate on earnings per share implies that Verizon will still be paying out just under 52% of its normalized earnings as dividends.

Verizon has a 52-week trading range of $43.97 to $55.21 and a consensus analyst target price from Thomson Reuters of $56.42. AT&T’s 52-week range is $30.13 to $39.80, and it has a consensus target price of $35.37.

The great dividend race continues.

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