AT&T vs. Verizon; Which is the Better Stock

Probably two of the most widely follow dividend stocks around would be Verizon VZ and AT&T T.  As we have stressed to reader and clients in the past, a company's dividend yield should not be the sole factor for why someone would purchase a stock.  But with treasury yields producing next to nothing, dividend yields are one metric that catches an investor's eye quickly.

This WSJ article offers some compelling reasons why one who is looking at either VZ or T would purchase one over the other.  Full disclosure I personally own shares of VZ and we hold a position in T in the DWCM Fund.

We believe that owning either or both companies would likely serve investors well over the long-term despite the varying degrees of growth between the two companies.  We have both companies highly rated within stock model so it really comes down to what your entry point is.

A few points from the WSJ article

• Nearly all of the ARPU growth at both companies stems from feature-phone users upgrading to smartphones. But AT&T, which has offered the iPhone since the second quarter of 2007, already has about 64% of its postpaid base on smartphones. That compares with only 53% at Verizon, leaving AT&T with a shorter runway.
• Verizon, which got the iPhone in the first quarter of 2011, has seen ARPU rise 5.3% since then, compared with 2.9% growth for AT&T. Verizon also grew earnings faster in the third quarter, with wireless-service margins on the basis of earnings before interest, taxes, depreciation and amortization reaching 50%, compared with 40.8% for AT&T.