Revaulation Rolls On for AT&T and Verizon

The radical revaluation for AT&T (T - commentary - Cramer's Take) and Verizon (VZ - commentary - Cramer's Take) isn't done. It's about halfway through. That's because these stocks were down for two bogus reasons: the wireline line pull statement by AT&T at a now much-discredited meeting -- discredited from the point of view of the media -- and the $99 plan, which was supposed to crush business but instead stimulated it.

Both companies spend like mad to upgrade their networks for video, with Verizon going at it like you wouldn't believe. AT&T's iPhone distribution can only get more exciting if Apple goes with cell phone iChat, which I believe it will.

FiOS will soon be a nice growth engine for Verizon when New York City begins building. I think that the iPhone can do 10 million units in this country shortly. These are two wins that didn't exist last year. The iPhone is not nipping T's earnings, and FiOS is not hurting Verizon's earnings like the critics thought they would.

These companies can increase dividends and continue to buy back stock because they have such unbelievable cash flow.

We are talking about two stocks that traded substantially higher before all of this worry -- Verizon to $46 and AT&T to $42. Given their outsized dividends, consistent numbers even into a recession, and strong business lines that didn't exist not that long ago, why can't they still be bought?

I think they can, especially now that we have relearned how recession-proof they really are.

At the time of publication, Cramer was long Verizon.

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