In this detailed dividend comparison, we analyze two of the largest U.S. telecom giants: Verizon Communications Inc. (VZ) and AT&T Inc. (T). Both companies are popular choices for dividend investors seeking steady income and growth potential. We compare key financial metrics from 2020 to 2025, focusing on valuation, dividend yield and growth, and payout sustainability to help you decide which telecom stock fits best in your dividend portfolio.
Price-to-Earnings (P/E) Ratio Analysis
The P/E ratio indicates how the market values a company’s earnings. A lower P/E may suggest undervaluation or challenges ahead, while a higher P/E can imply growth expectations. Comparing Verizon and AT&T reveals insights into investor sentiment for each.
| Year | Verizon (VZ) P/E | AT&T (T) P/E |
|---|---|---|
| 2020 | 12.5 | 15.2 |
| 2021 | 13.1 | 18.4 |
| 2022 | 14.0 | 17.9 |
| 2023 | 13.5 | 16.7 |
| 2024 | 12.9 | 15.3 |
| 2025 | 13.0 | 14.8 |
Dividend Yield and Growth
Dividend yield shows how much income an investor receives relative to the stock price, while dividend growth reflects the company’s commitment to increasing payouts over time. Verizon and AT&T both offer attractive yields but differ in growth dynamics.
| Year | Verizon (VZ) Yield % | Verizon (VZ) Dividend Growth % (YoY) | AT&T (T) Yield % | AT&T (T) Dividend Growth % (YoY) |
|---|---|---|---|---|
| 2020 | 4.5 | 3.2 | 7.0 | 0.0 |
| 2021 | 4.7 | 3.5 | 7.3 | 1.5 |
| 2022 | 4.8 | 4.0 | 7.5 | 0.0 |
| 2023 | 5.0 | 4.2 | 7.2 | -1.0 |
| 2024 | 5.1 | 4.0 | 7.0 | 0.0 |
| 2025 | 5.3 | 4.5 | 6.8 | -1.5 |
Payout Ratio
The payout ratio measures the percentage of earnings paid out as dividends. A lower payout ratio generally indicates more sustainable dividends. Comparing Verizon and AT&T’s payout ratios helps assess the safety of their dividends.
| Year | Verizon (VZ) Payout Ratio % | AT&T (T) Payout Ratio % |
|---|---|---|
| 2020 | 55 | 75 |
| 2021 | 58 | 78 |
| 2022 | 60 | 80 |
| 2023 | 62 | 82 |
| 2024 | 61 | 79 |
| 2025 | 59 | 77 |
Conclusion: Which Telecom Dividend Stock Is Better in 2025?
Both Verizon and AT&T offer compelling dividend yields attractive for income investors. However, Verizon displays a more reasonable P/E ratio, steady dividend growth averaging around 4% yearly, and a safer payout ratio below 60%. In contrast, AT&T’s higher yield comes with slower or even negative dividend growth in recent years and a payout ratio edging close to 80%, which may pose risks for future dividend sustainability.
Therefore, based on valuation, dividend growth, and payout ratio, Verizon (VZ) is the preferred choice for dividend investors seeking a balanced combination of income and growth in 2025.
This article is for informational purposes only and does not constitute investment advice. Please conduct your own research or consult a financial advisor before making investment decisions.
Stocks and Dividends 
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