Dividends4Life: 1 Dividend Stock To Buy, and 1 To Dump Immediately

Dividend Growth Stocks News

Plenty of investors see telecom stocks like AT&T (T) and Verizon (VZ) as cornerstones of any income portfolio. Heck, many even like Comcast (CMCSA) as a dividend stock-growth staple. But do they really deserve that honor? And if so, which stock is best for you? Below, we’ll zero in on a few crucial numbers that tell the tale. That said, in a head-to-head matchup between AT&T and Verizon, I do have a clear favorite. Let’s start at the top — with dividend yields — and work our way out from there.

Both telecoms offer healthy yields (5.6% for AT&T vs. 5.0% for Verizon), but Verizon has hiked its payout more quickly than AT&T since 2008, at an average of 4.5% annually vs. 2.8%. In the end, these are similar companies with similar prospects, and the market sees it that way, too, valuing both at around 11 times their forecast profits in the next 12 months. But even so, I still see VZ as the better choice, thanks mainly to its better dividend coverage. It also has lots of smaller, but no less important, advantages

Source: InvestorPlace

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