Despite the current stock market volatility, the telecom sector has emerged as a resilient industry. Investors consider telecom stocks stable due to the importance of mobile devices, which allows companies to generate and report steady cash flow. Two major industry players, Verizon Communications Inc. (NYSE: VZ) and AT&T Inc. (NYSE: T), have seen their shares move higher despite the market slump. Both the stocks have surged in 2025 and the momentum could continue. They are dividend-paying companies that make compelling investments. But if you have to choose between the two, here’s what you must know. 

Verizon Communications

Verizon has a growing fiber-optic broadband business and a mobile service. The company is expanding its fibrotic network and has over 12.6 million broadband connections as of the first quarter of 2025, which is an impressive 13.7% year-over-year jump. 

VZ stock is exchanging hands for $43.74 and is up 8.78% year-to-date. It is up 12.47% in 12 months and 6.53% in 6 months. The stock is very close to the 52-week high of $47.36. It has a dividend yield of 6.15% and has increased dividends for 18 consecutive years. 

Verizon Communications had an excellent start to the year and generated $25.6 billion in revenue for the recent quarter. Additionally, it saw a 2.7% year-over-year jump in wireless service sales which generated $20.8 billion. The consumer wireless service revenue was up 2.6% year-over-year to $17.2 billion. Verizon reported 109,000 fixed wireless net additions in the quarter and 339,000 broadband net additions. Unfortunately, it lost 289,000 subscribers in the postpaid phone segment. 

For 2025, the company is aiming to see wireless service revenue growth between 2% to 2.8% and aims for a cash flow in the range of 17.5 billion-$18.5 billion. 

In order to increase its market share, Verizon Communications has acquired Frontier Communications and through this acquisition, it aims to add about 10 million broadband connections by 2026, when the deal is expected to close. Due to this deal, the company expects the annual free cash flow to dip temporarily. 

AT&T Inc. 

AT&T has gone through a rough period but has emerged stronger. It is focusing on growing the 5G wireless and broadband networks. In 2024, it saw a 3.5% year-over-year jump in mobile service revenue to $65.4 billion and spent $20.3 billion in capital expenditure. The company’s total revenue stood at $122.3 billion in the year. It intends to spend another $22 billion in capex this year.

In the most recent quarter, the company reported 261,000 net additions to the fiber business, which is its 21st straight quarter where this metric is over 200,000. Further, it saw 324,000 postpaid phone net additions and a 4.1% year-over-year jump in mobility service revenues. Its revenue was up 2% to $30.6 billion and the EPS stood at $0.61.

With 29.5 million fiber locations already up, the management is aiming to hit 30 million by the end of 2026. It hopes that the revenue from its wireless service increases by 3% this year while the free cash flow hits $16 billion.

Exchanging hands for $27.61 at the time of writing, T stock is up 21% year-to-date and 63.86% in 12 months. The stock is close to the 52-week high of $29.03 and has a dividend yield of 4.02%. It was once a dividend aristocrat but lost the streak in 2020 when it was under debt and had to spin off the WarnerMedia business. 

The management expects the free cash flow to reach at least $16 billion in the year and increase by another $1 billion annually through 2027. This will allow the company to increase the payout in the coming years. 

The verdict 

Mobile service is an important aspect of our lives and both Verizon Communications and AT&T are attractive investments. They have a strong presence, a growing user base, and solid fundamentals. When comparing the two, investors need to take a long-term perspective. AT&T has managed to achieve higher customer growth and higher free cash flow. However, it hasn’t increased the dividend in a long time, has a lower yield than Verizon, and is expensive. 

Both the stocks are good but investors seeking passive income should consider Verizon Communications. The Frontier acquisition could give a strong boost to the business. It has a higher yield, attractive valuation, and an expanding business which could lead to higher dividends in the coming years. Verizon has a P/E ratio of 10 which is much cheaper than AT&T’s which is 16.95. 

While investors might expect AT&T to raise dividends, Verizon is already growing dividends and has steadily increased the payouts. It is already providing value to investors. 

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