Episode summary
Verizon and AT&T Have Traded Places | Barron's Streetwise
Barron's Streetwise
· · Hosts: Jack Bary
Summary
Verizon is being framed as the telecom laggard with the best near-term setup. Jack Bary argues the stock looks cheap after AT&T’s run-up, with Verizon trading at about 9.4 times forward earnings and yielding just over 6%, while AT&T has become the consensus favorite on Wall Street. The key question is whether Verizon can reverse weak wireless share trends and turn its valuation discount into a bounce.
The bullish case centers on fiber and bundling. Raymond James analyst Frank Luthan says Verizon’s planned Frontier Communications acquisition should lift its broadband base from 18 million to about 28 million, with a path to 35 million to 40 million, making it easier to sell bundled wireless and fiber services and reduce churn. He also sees the business as a 12- to 18-month story, with improvements in wireless subscriber additions needed to drive the stock.
Tony Skiatis, Verizon’s CFO, says the company is committed to capital discipline, dividend growth, and debt reduction. He said Verizon has increased its dividend for 18 straight years and wants to be in position for a 19th straight increase, while also raising full-year cash flow guidance and waiting to outline longer-term plans once Frontier closes, likely by the first quarter of 2026.
Key takeaways
- Jack Bary says Verizon’s 6%-plus yield and 9.4x forward earnings multiple make it look cheap relative to AT&T, which has rallied hard.
- Frank Luthan says the Frontier deal could expand Verizon broadband customers from 18 million to about 28 million, with a path to 35 million to 40 million.
- Luthan’s bull case depends on Verizon improving wireless subscriber additions over the next 12 to 18 months.
- Tony Skiatis says Verizon has raised its dividend for 18 straight years and aims for a 19th increase.
- Skiatis says Verizon raised full-year cash flow guidance to 19.5 billion to 20.5 billion and remains focused on paying down debt.
Notable quotes
“We have a track record and a long track record of 18 straight years of dividend increases”
“Verizon traded recently at 9.4 times forward earnings estimates. At that price, it's trading at a 30% discount to AT&T”
“They have 18 million today. They are acquiring a company called Frontier that will get them to about 28 million”
“It's really going to get down to the the wireless subscriber ads”
“We have a track record and a long track record of 18 straight years of dividend increases”
How the episode opens
We have a track record and a long track record of 18 straight years of dividend increases and that's a record we're very proud of and our goal is to put the board in position to increase the dividend once again for the 19th straight year. Hello and welcome to the Baron Streetwise podcast. I'm Jack How and the voice you just heard is Tony Skiatis.
He's the CFO of Verizon and he's talking about the dividend. It's a biggie. I saw recently that Verizon had the 11th largest dividend yield in the S&P 500.
It's just over 6%. And to hear Tony, the payments sound reliable. Verizon stock looks a bit like AT&T did early last year when we talked about it on this podcast.
Since then, there's been a switcheroo. AT&T has run up. Verizon has fallen behind.
The stock looks cheap. Could Verizon be due for a bounce? In a moment, we'll hear from Tony and we'll get the bullc case from a Wall Street analyst.
We'll also hear about a tiny fiber broadband stock that could be a takeover target. And speaking of Target, I'll have a couple of quick comments about the retailer Target and about drinking. Probably start with Target and drinking.
Listening in is our audio producer, Alexis. Hi, Alexis.
Hi, Jack. Any business we need to get to before I turn to Target and drinking? — Uh, yeah. I think you should tell the people about how you almost hit a bird. — Well, I Yeah, I did almost I guess it was a water fowl. Um, and it was
It was with my car. I was talking to you. I was in the car. I was driving past a pond near me and a — I think it's a heron.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- telecom stocks
- stock bounce
- cfo perspective
- wall street outlook
- verizon at&t trading
Companies and tickers mentioned
- VZ
- T
- Verizon
- AT&T
Watch the episode
Watch “Verizon and AT&T Have Traded Places | Barron's Streetwise” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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