AT&T (T) is the dominant local phone company in 22 states, serving about 41 million local phone lines, 16 million Internet users, and 3 million television customers.
The company has a projected dividend yield of 6.02% and a market value of $170 billion. Its shares, now trading at $28.58, are up 1.6% this year, and 4.6% over the past 12 months. Over three years, its shares have an average annual return of 3.8%.AT&T is expected to earn $2.36 per share this year. The company is only going to get bigger. On March 20, AT&T announced an agreement to acquire T-Mobile USA from Deutsche Telekom (DT) for about $39 billion, subject to regulatory approvals. The deal is expected to add about 34 million wireless customers and the transaction is expected to be accretive to earnings in the third year, according to BMO Capital Markets analysts. Those analysts said in a research report that AT&T's "stock is attractively valued relative to its peers and the market in general on most metrics" so it is maintaining its "outperform" rating on its shares, based on the AT&T's strong strategic position, and potential to improve operational and financial performance. Analysts give its shares 14 "strong buy" ratings and 12 "holds," according to TheStreet Ratings.
Verizon (VZ) serves about 25% of the U.S. population via its long-haul network. Verizon Wireless, the firm's 55%-owned partnership with Europe's Vodafone (VOD), serves about 94 million customers across the U.S. Verizon is expected to earn $2.25 per share this year. Its shares have a 5.43% projected dividend yield and a market value of $104 billion. Currently trading at $36.88, its shares are up 7% this year and 19% over the past 12 months and boast a three-year annualized average return of 12%. BMO Capital Markets gives its shares an "outperform" rating based on "the company's leading wireless franchise, extensive broadband footprint and potential for improving financial performance in the coming quarters." Analysts are all over the place on Verizon's shares, giving them 10 "strong buy" ratings, one "moderate buy," 15 "holds," one "moderate sell," and one "strong sell," according to TheStreet Ratings.
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