NEW YORK (TheStreet) -- "There is a new world here in some very stable stocks," TheStreet's Jim Cramer, co-manager of the Action Alerts PLUS portfolio, said Wednesday about AT&T (T) and Verizon (VZ) . 

Shares of each company continue their decline from Tuesday, after management from both companies made comments about a weaker-than-expected fourth quarter. 

On CNBC's "Cramer's Mad Dash" segment, Cramer pointed to an analyst's report from Citigroup, which suggested that AT&T shares could drop to $30.

That would represent a dividend yield of 6%, he said. 

A drop that far would be "staggering" considering the low of volatility with which these two stocks generally trade, Cramer said. 

VZ Chart
AT&T T and Verizon VZ data by YCharts.

It isn't just AT&T and Verizon that could have trouble going forward. 

Cramer reminded investors that T-Mobile U.S. (TMUS) recently raised $1 billion in convertible bonds in order to keep pace with the promotional environment. 

And while Sprint (S) may seem cheap at $4.30 a share, the stock actually trades at 8.8 times 2016 earnings before interest, taxes, depreciation and amortization, double what its peers trade at, according to an Oppenheimer & Co. report, he said. 

However, Dish Network (DISH) and the consumer are the big winners here.

Dish has billions of dollars worth of spectrum which the phone carriers will need, while the consumer benefits from lower phone bills and falling gasoline prices, Cramer said. 

-- Written by Bret Kenwell

Follow @BretKenwell


TheStreet Ratings team rates AT&T INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate AT&T INC (T) a BUY. This is driven by multiple strengths, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, reasonable valuation levels, largely solid financial position with reasonable debt levels by most measures, notable return on equity and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

You can view the full analysis from the report here: T Ratings Report


TheStreet Ratings team rates VERIZON COMMUNICATIONS INC as a Buy with a ratings score of B. TheStreet Ratings Team has this to say about their recommendation:

"We rate VERIZON COMMUNICATIONS INC (VZ) a BUY. This is driven by several positive factors, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, compelling growth in net income, expanding profit margins and growth in earnings per share. We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated."

You can view the full analysis from the report here: VZ Ratings Report

At the time of publication, Cramer's Action Alerts PLUS had no position in companies mentioned.

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