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AT&T vs. Verizon: Which Is the Better Dividend Play?

Verizon is an attractive play for dividend investors at the current market price.

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Michael Hodel: Telecom stocks are among the highest-yielding in the equity market. AT&T and Verizon, the big two U.S. telecom carriers, certainly fit that bill. AT&T's yield today is about 6%; Verizon's is about 4.5%.

Despite the fact that Verizon's yields are a little bit lower, we actually like that company and that stock better today. We think Verizon's focus on the core telecom business will position the firm well for the long term, especially if something unexpected happens in the telecom business. For example, the cable companies are potentially eyeing the wireless business and could get into the space at some point over the next several years. If wireless technology advances to the point that enables the cable companies to come in and disrupt the market, we think Verizon is positioning itself better for that to happen.

Michael Hodel does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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