T vs VZ: Dividend Comparison
Dividend data as of
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.
Verdict
Yield Analysis
VZ yields 1.72% more than T. In dollar terms, T pays $1.11/share vs VZ's $2.73/share annually.
Dividend Growth
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: The payout ratio of 27% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.7x.
VZ: The payout ratio of 50% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 1.5x.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in T vs VZ today?
At $28.68 per share, $10,000 buys about 348.6 shares of At&T Inc. (T). Each share pays $1.11 per year in dividends, so the position starts out generating roughly $387 per year — about $32 a month.
At $49.07 per share, $10,000 buys about 203.8 shares of Verizon Communications Inc (VZ). Each share pays $2.73 per year in dividends, so the position starts out generating roughly $557 per year — about $46 a month.
VZ is the larger income stream from day one: $170 per year more on the same $10,000 invested.
What could $10,000 of T or VZ income look like in 10 years?
At&T Inc. (T)'s dividend has shrunk about 8.1% a year over the past five years. If that trend continued, today's $405 per year on $10,000 (at the current 4.05% yield) would fall to $174 per year by 2036.
Verizon Communications Inc (VZ) has raised its dividend about 9.5% a year over the past five years. If that pace held, the $577 per year that $10,000 generates today at the current 5.77% yield would reach $1,428 per year by 2036 — a 14.3% yield on the original cost.
On those trailing rates, VZ pays more in 2036: $1,428 versus $174 per year. The projection assumes each five-year growth rate persists and no dividends are reinvested — real payouts will differ.
When would T's dividend growth overtake VZ's higher yield?
It doesn't, on the trailing numbers. Verizon Communications Inc (VZ) yields more today (5.77% vs 4.05%) and has also grown its dividend at least as fast (9.5% vs -8.1% a year over five years). Unless T accelerates its raises or VZ stumbles, T never closes the income gap — VZ wins on both current income and growth.
Can T and VZ afford their dividends?
At&T Inc. (T) earns $3.04 per share against $1.11 paid out in dividends — 2.7x coverage (a 27% payout ratio).
Verizon Communications Inc (VZ) earns $4.06 per share against $2.73 paid out in dividends — 1.5x coverage (a 50% payout ratio).
T's wider coverage leaves more cushion if earnings dip. As a rule of thumb, coverage below about 1.5x (a payout ratio above ~65%) is where a dividend starts to look stretched — worth watching for VZ if earnings weaken.
Which fits an early-retirement income portfolio better, T or VZ?
For income you need right now, Verizon Communications Inc (VZ) leads: $100,000 invested today pays about $481 a month at the current 5.77% yield, versus $337 a month from At&T Inc. (T) at 4.05%.
VZ also leads on dividend growth (9.5% vs -8.1% a year over five years), so the trailing numbers favor it on both fronts.
Many income investors simply hold both — the mix pairs current yield with growth and spreads single-name risk. Whichever way you lean, dividends are never guaranteed; recheck the payout each quarter rather than setting and forgetting.
$10,000 with DRIP: projected annual income
If each holding keeps raising its dividend at its real 5-year rate and every payment is reinvested, a $10,000 position pays $259/yr in T vs $2,502/yr in VZ by year 10.
Assumes dividends are reinvested at the current yield and grow at each holding's trailing 5-year dividend CAGR. A projection, not a prediction — no price appreciation modeled.
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