T vs VZ: Dividend Yield, Growth & Safety Comparison
At&T Inc. (T) and Verizon Communications Inc (VZ) are both in the Communication Services sector, making them natural rivals for dividend investors. VZ offers a significantly higher 5.77% yield compared to T's 4.05%, a gap of 1.72%. For dividend growth, VZ leads with a 5-year CAGR of 9.5% versus T's -8.1%. Both stocks carry a "Safe" dividend safety rating.
Key Metrics Comparison
| Metric | T | VZ |
|---|
| Dividend Yield | 4.05% | 5.77% |
| Annual Dividend | $1.11 | $2.73 |
| 5-Year CAGR | -8.1% | 9.5% |
| Payout Ratio | 27% | 50% |
| Consecutive Years | 0 | 0 |
| Price | $28.68 | $49.07 |
Yield Comparison
Verizon Communications Inc (VZ) currently yields 5.77%, which is attractive for the broader market. That's 1.72% more than At&T Inc. (T), which yields 4.05%. In dollar terms, VZ pays $2.73/share annually versus T's $1.11/share.
Dividend Growth
Over the past five years, VZ has grown its dividend at a 9.5% CAGR compared to T's -8.1%. T: Dividend growth is accelerating — the 3-year CAGR of 15.5% exceeds the 5-year rate of -8.1% and the 10-year rate of -2.8%. VZ: Dividend growth is accelerating — the 3-year CAGR of 17.6% exceeds the 5-year rate of 9.5% and the 10-year rate of 5.3%.
Dividend Safety
T's dividend safety is rated "Safe." The payout ratio of 27% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.7x. VZ's dividend safety is rated "Safe." The payout ratio of 50% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 1.5x. T's payout ratio of 27% is more conservative than VZ's 50%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in VZ generates approximately $577/year in dividend income, compared to $405/year from T — a difference of $172/year. At $100,000, that gap widens to $1720/year.
Verdict
- Best for income: VZ
- Best for growth: VZ
- Best for safety: T
Frequently Asked Questions
Which has a higher dividend yield, T or VZ?
Verizon Communications Inc (VZ) has a higher dividend yield of 5.77% compared to At&T Inc. (T) at 4.05%.
Is T or VZ a better dividend growth stock?
Verizon Communications Inc has the stronger dividend growth with a 5-year CAGR of 9.5%, compared to At&T Inc.'s -8.1%.
Which is safer for dividend income, T or VZ?
At&T Inc.'s dividend safety is rated "Safe" while Verizon Communications Inc is rated "Safe." The payout ratio of 27% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.7x. The payout ratio of 50% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 1.5x.
How much income does $10,000 in T vs VZ generate?
A $10,000 investment in T generates approximately $405/year in dividends, while the same amount in VZ generates about $577/year.
Which has a lower payout ratio, T or VZ?
At&T Inc. has a lower payout ratio of 27% compared to Verizon Communications Inc's 50%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
T vs VZ: which is better for retirement income?
It depends on your priorities. VZ for current income, VZ for dividend growth, T for safety. Many retirement investors hold both for diversification.
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