AT&T Froze Its Dividend After a 2022 Cut. Is Verizon the Better Income Stock?
Both telecom giants just raised guidance, but retirees collecting dividend checks face a stark choice between a yield that keeps climbing and one frozen after a painful cut. The math behind each payout tells a very different story about which…
Verizon (NYSE:VZ | VZ Price Prediction) and AT&T (NYSE:T) both raised guidance in their latest earnings reports. Retirees, however, get very different checks. Verizon offers a forward yield near 6.26% and keeps raising it. AT&T yields about 4.88% on a payout frozen since its 2022 cut. Income durability now matters more than headline yield.
Verizon Raises the Check While AT&T Holds It Flat
Verizon raised its quarterly dividend to $0.7075 from $0.69 this year, extending a record that began at $0.565 in 2016. That steady ladder helps a retiree keep pace with inflation.
AT&T paid $0.52 per quarter until early 2022, then cut to $0.2775, where it has stayed. Management plans to hold $1.11 annualized through 2028. Predictable, yes. Yet a flat check loses purchasing power every year.
| Income Lens | Verizon | AT&T |
|---|---|---|
| Quarterly Dividend | $0.7075 | $0.2775 |
| Forward Yield | 6.26% | 4.88% |
| Track Record | 19 consecutive yearly raises | Flat since 2022 cut |
| Leverage | 2.5x | 3.13x |
| 2026 Free Cash Flow Outlook | $21.94B to $22.14B | $18B+ |
Fewer Subsidies Fund Verizon’s Payout
Verizon paid $5.9 billion in first-half dividends against $10.2 billion of free cash flow, about 58% of free cash flow. The source is operational: equipment revenue fell nearly 20% as subsidies shrank, while EBITDA margin hit 40.1%. Customers still came, with 184,000 postpaid phone net adds. Management summed it up: “We’re growing our dividend, and we are paying down our debt.”
AT&T’s dividend used about 40% of third-quarter free cash flow, a smaller load. The pressure sits elsewhere. AT&T targets ~$10B of 2026 buybacks and $23-24B of capex, and leverage rose after the $23 billion EchoStar (NASDAQ:SATS) spectrum purchase. The growth engine works: a record 769,000 Advanced Connectivity internet net adds and fiber reaching 39M+ locations.
Verizon’s Upcoming Report Tests the Momentum
Verizon reports again soon, and I’ll focus on fixed wireless, where net adds fell 30.6%. Account revenue also slipped 1.4%, a crack worth monitoring. For AT&T, Barron’s highlighted Starlink fears weighing on shares, and fiber ARPU dropped 4%. Deleveraging back to 2.5x does not arrive until 2029.
Why Verizon’s Income Profile Stands Out for Retirees
For income investors, Verizon holds the edge on the data in this comparison: a higher yield, a payout that still increases, lower leverage, and comfortable cash coverage built on cheaper customer acquisition. That edge would weaken if leverage falls short of the 2027 target range or subscriber gains stall without subsidies. Total-return investors who value heavy buybacks and fiber expansion may prefer AT&T and its $24B+ repurchase plan through 2028. Retirees leaning on these checks should think in ladder terms rather than single names, the approach we laid out in a free guide on building lifetime income without selling shares: here.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
