The Check Is Still In The Mail…
Cutting a dividend is usually the sort of thing investors remember.
AT&T gave them a pretty good reason to in 2022.
As the company spun off WarnerMedia, it slashed its quarterly payout from $0.52 to $0.2775 — a 47% cut.
And there it has stayed.
Verizon has spent those same four years doing pretty much the opposite.
Its dividend kept climbing, extending a streak that has now reached 20 consecutive years.
CEO Dan Schulman recently went as far as calling Verizon’s commitment to that streak “ironclad.”
So, on dividend history alone, this looks like a fairly easy contest.
Twenty straight raises on one side.
A 47% cut and four years without a raise on the other.
Except the cash underneath those dividends tells a different story.
And four years after AT&T made the cut, the comparison between the two looks considerably closer than you might expect.
Let’s dig into it. ⇩
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Take a look at this chart:
That’s the Buffett Indicator — the value of the entire stock market measured against U.S. GDP.
Warren Buffett called it “probably the best single measure” of where valuations stand.
“Playing with fire” — that’s what he called readings near 200% back in the dot-com era.
Today it reads higher than 1999. Higher than 2021. Near the highest level ever recorded.
At his final shareholder meeting, Buffett said people have never been “in a more gambling mood” than now.
His firm is sitting on a record $397 billion in cash.
So is a crash coming? That’s the wrong question.
My name is Alexander Green. In 40 years as a professional investor, I’ve learned that charts like this never tell you WHEN. But there’s a pattern that does.
The Cut That Changed the Math…
Here is the AT&T’s side of the story.
Before the WarnerMedia spin-off, the company was paying $0.52 per share every quarter.
Afterward: $0.2775. ↓
That smaller check made a very large difference.
AT&T paid $15.07 billion in dividends in 2021. Since 2023, that figure has settled at roughly $8.2 billion a year.
Meanwhile, free cash flow has run at more than twice the dividend bill every year since.
Today, AT&T’s $T ( ▲ 0.78% ) cash dividend payout ratio — the share of available cash going toward dividends — sits at:
→ 45% trailing 12 months
→ 46% forward
That leaves more than half the cash available after the dividend for other priorities.
And AT&T has found one.
The company plans to spend roughly $10 billion buying back its own shares this year, while keeping the annual dividend unchanged at $1.11.
So the dividend cut did something rather important.
It created a lot of financial room for AT&T.
✱ Verizon never made that reset. And yet, its dividend math still looks surprisingly comfortable.
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20 Years and Counting…
Now Verizon $VZ ( ▲ 0.28% ) .
Its quarterly dividend now sits at $0.7075 per share, extending a streak of increases that has reached 20 consecutive years.
And despite all those raises, the payout still isn’t stretching the company’s cash particularly hard.
Verizon’s cash dividend payout ratio sits at:
→ 54% trailing 12 months
→ 54% forward
That’s higher than AT&T’s 45%–46%, but still leaves nearly half of available cash outside the dividend.
The underlying business is helping too.
Service revenue growth accelerated from 1.6% in Q1 to 2.8% in Q2, while adjusted EBITDA climbed 7.2%.
Verizon now expects free cash flow to grow 9%–10% in 2026.
And that growing cash pile is funding more than the dividend.
The company also plans up to $4.5 billion in share buybacks.
→ So AT&T has the bigger cushion.
Verizon has something else: a bigger check that keeps getting bigger.
✱ At today’s yields, that difference becomes pretty noticeable on a $10,000 investment. ↓
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The $160 Difference…
“Who pays better?” depends on what better means.↓
This is where Verizon starts to pull ahead.
At current forward yields:
→ $10,000 in Verizon = ~$620 a year in dividends
→ $10,000 in AT&T = ~$460 a year
That’s roughly $160 more annual income from the same $10,000 investment.
And Verizon’s payout is still growing.
AT&T’s hasn’t moved since the 2022 reset.
But there’s another side to that extra income.
AT&T is keeping more cash inside the business and plans roughly $10 billion of buybacks this year, compared with up to $4.5 billion at Verizon.
So the trade-off starts to become clearer.
Verizon sends more cash directly to shareholders.
AT&T keeps more financial room after the dividend.
✱ And both still have one very large item competing for that cash: debt. ↓
The Weight on Both Sides…
There is one number neither company gets to ignore.
Debt.↓
AT&T recently closed its roughly $23 billion spectrum purchase from EchoStar, pushing leverage to about 3.2x by the company’s measure.
Its target: 2.5x within roughly three years.
Verizon has its own sizable balance sheet.
Its acquisition of Frontier came with roughly $12.9 billion of Frontier debt, most of which Verizon says it has already repaid.
Even so, net debt still sits at roughly 3.35x EBITDA.
That doesn’t make either dividend immediately uncomfortable.
Both companies are generating enough cash to cover their payouts, with room left over.
But it does explain why that extra room matters.
Dividends aren’t the only checks these companies have to write.
✱ And that’s why the longest streak doesn’t necessarily tell you which dividend is in the strongest position.↓
The Check Behind the Check…
Twenty years of dividend raises looks pretty good on a chart.
A 47% cut does not.
But history only gets you so far.
A dividend still has to be paid every quarter — and that means the cash underneath it matters just as much as the streak attached to it.
AT&T is a useful example.
Its dividend history got considerably uglier in 2022. Its dividend math got considerably better.
Verizon kept the streak alive and still comfortably covers its payout, but it sends a larger share of its available cash out the door.
Neither approach makes one dividend automatically “better.”
It just means the first question shouldn’t be “How long has it paid?” or “How big is the yield?”
It should be:
How easily can the business afford the next check?
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