Key Takeaways
- Verizon yields 6.1% and AT&T 5.2%, after SpaceX’s moves into wireless sent both stocks lower in October.
- Both dividends are well covered, using 52% and 44% of free cash flow over the 12 months to Sept. 30, 2026.
- AT&T plans to hold its dividend at $1.11 a share, while Verizon’s dividend grew 1.9% a year from fiscal 2020 to fiscal 2025.
- Analysts expect free cash flow to rise at both companies in fiscal 2026, and SpaceX plans to start mobile service on its own airwaves in early 2028.
SpaceX gave telecom income investors a real scare this fall. On Oct. 9, it agreed to buy a nationwide block of low-band spectrum from Grain Management for its Starlink Mobile service. Verizon Communications (VZ) fell nearly 9% that day, and AT&T (T) dropped by double digits.
SpaceX kept pushing. On SpaceX’s Oct. 20 earnings call, President Gwynne Shotwell said a new spectrum purchase and FCC satellite approval would help Starlink Mobile become a major US carrier.
So if you own either one for its dividend, which check is the better one to count on?
| Metric | Verizon (VZ) | AT&T (T) |
|---|---|---|
| Dividend yield | 6.1% | 5.2% |
| Annual dividend | $2.83 | $1.11 |
| Dividend growth, fiscal 2020-2025 | 1.9% a year | -11.8% a year |
| Cash dividend payout ratio (TTM) | 52% | 44% |
| Cash dividend payout ratio (fiscal 2026 consensus) | 53% | 46% |
| Net debt / EBITDA | 3.28x | 3.27x |
| Interest coverage (EBIT / interest) | 4.27x | 3.9x |
Source: TIKR and StockAnalysis, Nov. 5, 2026.
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Verizon’s growth is back
Verizon’s core business is picking up speed. Mobility and broadband service revenue rose 2.9% to $23.5 billion in the third quarter of 2026 from a year earlier, and it added 406,000 postpaid phone customers.
The cash is growing too. Free cash flow rose 12.1% to $7.8 billion in the third quarter, and Verizon now expects full-year growth to approach 12%, up from its earlier 9% to 10%. Over the 12 months to Sept. 30, 2026, the dividend used a well-covered 52% of free cash flow. Analysts see 53% for fiscal 2026.
Free cash flow has covered the dividend every year since fiscal 2018:
(The tightest year since then was fiscal 2022, at 77%.)
TIKR’s figures show 19 straight fiscal years of higher dividends per share, though the raises are small: from $2.48 a share in fiscal 2020 to $2.73 in fiscal 2025. On its third-quarter call, management said, “We remain committed to growing the dividend and delivering enhanced returns to our shareholders through share repurchases.” A 53% forward payout leaves room to keep that promise.
The main risk is SpaceX. A fourth national carrier would go straight after the wireless cash that pays this dividend.
AT&T has a bigger cushion and a smaller check
AT&T has even more room than Verizon, because its dividend is much smaller than it used to be. AT&T cut it from $2.08 a share in fiscal 2020 to $1.11 in fiscal 2025. On Oct. 21, it said it plans to keep the dividend at $1.11.
Dividends paid fell from $15.1 billion in fiscal 2021 to $8.18 billion in fiscal 2025, and free cash flow covered them every year:
That puts AT&T’s cash dividend payout ratio at a comfortable 44% over the 12 months to Sept. 30, 2026, and 46% on fiscal 2026 consensus. The business is healthy too. Third-quarter revenue rose 5.3% to $32.3 billion, and AT&T added a record 769,000 fiber and fixed wireless internet customers. CEO John Stankey thinks fiber gives AT&T the edge: “the most durable customer combination in our industry is a fiber-fed broadband customer with a great wireless service on top of it, bar none.”
The extra cash is going to buybacks: $24 billion or more through 2028, including about $10 billion in 2026. Debt is the risk. AT&T says its leverage won’t return to its 2.5x target until 2029, after its EchoStar spectrum purchase.
So which dividend wins?
Verizon is the better dividend stock. It pays the bigger check today, and it’s still raising it.
$10,000 in Verizon pays $607 a year now, against $520 from AT&T. If Verizon keeps raising at its fiscal 2025 pace of 1.5%, that grows to about $693 in year 10. That’s close to a 7% yield on your original $10,000. AT&T’s would still be $520 if it holds its rate, so its income never catches up.
Analysts expect Verizon’s free cash flow to keep rising, from $20.1 billion in fiscal 2025 to $22.2 billion in fiscal 2026:
That leaves Verizon plenty of room for its next raise.
AT&T’s dividend is safe. Its coverage is wider, and it guides free cash flow to $21 billion or more in 2028. But most of the $45 billion or more it plans to return to shareholders from 2026 to 2028 goes to buybacks, while Verizon puts more of its cash into your dividend check.
SpaceX could still shake up both of them. Its own airwaves aren’t due until early 2028, so watch for how fast Starlink Mobile wins customers once it launches.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
