Starlink is providing free broadband service to the people of Venezuela through February 3, ensuring continued connectivity. ...

Core Viewpoint - Verizon Communications is facing challenges despite its 6.6% dividend yield, which has been described as "sacrosanct" by the CEO, Daniel Schulman. The company has a history of increasing dividends for 19 consecutive years, but the growth has been modest compared to inflation [1][2][10]. Financial Performance - Verizon reported $134.8 billion in revenue for 2024 and serves 146.1 million wireless retail connections, covering 99% of Fortune 500 companies and 99% of the U.S. population with its 4G LTE service [5]. - The company has lost 30% of its market share since 2017 and is now ranked No. 3 in the telecom industry, indicating heightened competition [6]. - In the last quarter, Verizon lost 7,000 postpaid phone customers and laid off 13,000 employees, reflecting dissatisfaction with its performance [7]. Dividend Analysis - Verizon's dividend has increased by only 1.8% this year, which is below the annual inflation rate of 3%. Since 2020, the dividend has grown by 12%, also lagging behind inflation [2][12]. - The company declared a quarterly dividend of $0.69 per share, amounting to $2.92 billion in dividends next quarter, which is less than half of the $7 billion in cash flow from operating activities [10]. - Verizon has paid off $9.4 billion in debt over the last year, which is nearly equivalent to the $11.2 billion paid in dividends for 2024, allowing for potential flexibility in maintaining dividends [11]. Strategic Outlook - The new CEO aims to reclaim network leadership, with some positive indicators such as 306,000 net adds in the broadband segment, totaling 13.2 million subscribers [8]. - Efficiency gains have led to a record $7 billion in free cash flow for the company, marking a 17% year-over-year increase [9]. - While the dividend is expected to remain stable, future hikes may be minimal, making it less appealing for long-term investors due to inflation concerns [12].

Core Viewpoint - AT&T has shown strong performance with a 24% stock increase in 2025, contrasting with a 3% decline in the S&P 500, indicating its stability amid market volatility [1] Group 1: Financial Performance - For the full year ended December 31, AT&T's wireless service revenue grew by 3.5% year over year, driven by the addition of 1.4 million net postpaid subscribers and gradual price hikes [4] - Broadband services experienced a 7.2% annual revenue increase, with fiber revenues surging by 18% compared to 2023 [4] - AT&T anticipates further growth in 2025, setting a free cash flow target of at least $16 billion, an increase of $700 million from 2024 [6] Group 2: Strategic Initiatives - The company completed a significant restructuring by spinning off WarnerMedia in 2022, allowing a refocus on core telecom strengths, resulting in reduced debt and more durable cash flow [3] - Approximately 40% of AT&T's fiber customers also have a wireless plan, up from 35% in 2021, showcasing effective cross-selling and customer relationship deepening [5] Group 3: Shareholder Returns - AT&T maintains a quarterly dividend of $0.28 per share, yielding 3.9%, with an annualized payout ratio of about 55% of the 2025 EPS guidance of $1.97 to $2.07 [7] - The company has announced a $10 billion share repurchase plan, reaffirming its commitment to rewarding shareholders [7] Group 4: Market Position and Valuation - AT&T's stock is viewed as a defensive position in the current market, expected to be insulated from economic slowdowns due to the essential nature of its services [8] - The stock is trading at a forward P/E ratio of 13.3, significantly higher than last year's below 8, and compared to Verizon's 9.6, raising concerns about valuation sustainability [10]