AT&T's Dividend Cushion Outperforms Verizon's

AT&T's dividend cushion is thicker than Verizon's, making it a stronger dividend hold. AT&T's latest dividend deceleration is less severe compared to Verizon's, indicating a more stable dividend profile. The article also highlights that AT&T is a stronger dividend hold than T-Mobile US, with a more sustainable dividend payment.

Investors seeking robust dividend yields have been drawn to telecommunications giants Verizon (NYSE: VZ) and AT&T (NYSE: T). However, a recent analysis [2] has revealed that AT&T's dividend cushion is thicker than Verizon's, making it a stronger dividend hold. This analysis, based on the latest dividend declarations and financial data, highlights AT&T's more stable dividend profile compared to Verizon.

AT&T's latest dividend deceleration was less severe than Verizon's, indicating a more sustainable dividend payment. The dividend cushion ratio (DCR) for AT&T, which measures the company's financial capacity to pay out future dividends, has improved and now sits further above its historical average. This improvement is attributed to AT&T's recent capital allocation decisions, including the acquisition of Lumen Technologies' mass-market fiber business, which is expected to expand its presence in key metropolitan areas.

In contrast, Verizon's DCR has declined noticeably, dropping below its historical average as of the trailing twelve months (TTM). This decline suggests a deterioration in Verizon's dividend safety, despite its recent dividend payout increase. Verizon's forward dividend yield of 6.36% is almost 70% above AT&T's forward yield of 3.95%, providing a substantial income boost to investors who need it. However, the lower DCR for AT&T reflects its better dividend safety and more flexible position to allocate capital towards growth.

The analysis also notes that AT&T is a stronger dividend hold than T-Mobile US, with a more sustainable dividend payment. This is supported by AT&T's lower valuation ratios compared to Verizon and its better dividend growth record in recent years. AT&T's 3-year dividend growth CAGR of 1.93% and 5-year growth rate of 1.96% indicate a more consistent dividend growth compared to Verizon's stagnation in the past few years.

In conclusion, the analysis suggests that AT&T's thicker dividend cushion makes it a stronger dividend hold than Verizon. While Verizon offers a higher current yield and better dividend growth in recent years, AT&T's improved dividend safety and more flexible capital allocation position it as a more attractive investment for dividend-focused investors.

References:
[1] https://www.aol.com/finance/yielding-6-3-verizon-better-094500637.html
[2] https://seekingalpha.com/article/4800640-att-vs-verizon-i-like-att-thicker-dividend-cushion
[3] https://www.forbes.com/sites/brettowens/2025/07/06/5-stocks-to-watch-for-great-dividend-growth/