AT&T vs. Verizon: Which Is The Better Buy?

(Preview) Company Update (T US, Neutral) (VZ US, Buy)

Summary

• Both Verizon and AT&T have low valuation multiples and good Dividend Yields, but we believe Verizon is a Buy while AT&T is to be avoided.

• Both companies are driven by wireless businesses, where Verizon has key advantages over AT&T, notably better revenue per user growth.

• Verizon also has a leading Prepaid business, MVNO relationships with the two main Cable operators, and is ahead in deploying spectrum.

• In residential broadband, Verizon has nearly completed its fiber roll-out and is aggressive on Fixed Wireless. AT&T is still catching up on fiber.

• Verizon has completed its restructuring and appears more efficient. AT&T is superficially cheaper, but not cheap enough given its issues.

Introduction

In this article we explain why we prefer Verizon over AT&T as an investment.

We initiated a Hold rating on AT&T (meaning we would avoid the stock) in July 2021 and a Buy rating on Verizon in September. Verizon has outperformed AT&T, losing 4.0% since our initiation compared to AT&T's loss of 1…