AT&T Inc. (T), Verizon Communications Inc. (VZ): You Cannot Afford To Miss This Opportunity!

Verizon Communications Inc. (NYSE:VZ)

Verizon is the largest telecom provider in the U.S. With approximately 100 million wireless subscribers, the company continues to benefit from a strong network and brand name, which could help spur more people to switch to Verizon. The company reported robust 4Q12 earnings with an 8.5% year over year rise in the wireless segment. Compared to the 780,000 postpaid additions of AT&T, Verizon added 2.1 million customers. At the end of 2012, Verizon had 92.5 million subscribers, compared to 70.5 million for AT&T, proving it is still ahead of AT&T in the wireless business. Verizon reported that 86.5% of all postpaid handsets sold in 4Q12 were smartphones v/s 70.3% in 4Q11.

The smartphone segment will continue to grow and contribute to the increase in operating expenses. The company also attracted its FiOS customers by giving them online access to its NFL network programming to enable them to watch their favorite football teams. Verizon is continuous in expanding its next-generation 100 gigabits-per-second network, allowing more network routes in the US and 2 additional routes in Europe. Verizon added 2.2 million retail net additions and 2.1 million of these were postpaid subscribers. By comparison, AT&T added 1.1 million new subs, and 780,000 were postpaid subscribers. It took Sprint Nextel Corporation (NYSE:S) nine months last year to add 942,000 subscribers.

Verizon’s dividend is also attractive. Currently investors receive 4.75% yield and the company’s EPS is expected to grow by roughly 7.5%. Verizon continues to be a U.S. powerhouse with strong growth potential, smart acquisition activity and increasing revenue.

Bottom Line

With the global Internet traffic expected to quadruple by 2015 and mobile broadband traffic increasing 35 times in five years, it is the best time to get into the sector. These dividend-paying stocks have the potential for both capital gains and income production. For the defensive investment player who wants to play safe, desires to have steady growth and dependable income, AT&T and Verizon are the top picks.

The article You Cannot Afford To Miss This Opportunity! originally appeared on Fool.com and is written by Kingshuk Dutta.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.