Introduction
The landscape of wireless carriers is rapidly changing as T-Mobile and AT&T make significant gains on Wall Street, outpacing traditional heavyweights like Verizon. Their latest stock performances indicate a resurgence in investor confidence and a shift in pricing power within the industry. With increasing dividends and a favorable market environment, these carriers are proving to be attractive investments for both income and growth-oriented investors.
AT&T has established itself as the third-largest wireless carrier in the U.S. and is gaining traction in stock performance, registering a remarkable 16.3% increase through March 6, 2025. This marks the company's best start ever, according to Dow Jones Market Data. In the same time frame, T-Mobile has reported an impressive 18.4% rise in its shares, while Verizon lags behind with a modest 9.6% growth.
Both T-Mobile and AT&T are significantly outperforming the S&P 500, which has seen a downturn of 2.8% during the same period. Investors are increasingly viewing wireless providers as lucrative opportunities, especially given the comparison with the current yield of 4.29% on 10-year Treasury Notes. In contrast, Verizon's dividend yield stands at 6.16% while AT&T offers a yield of 4.18%, rendering them particularly appealing for those seeking income.
However, the favorable stock performance can be attributed to more than just dividend yields. Analyst Peter Supino from Wolfe Research mentioned to MarketWatch that for the first time in years, wireless carriers have regained pricing power. Regular price increases have now become a standard practice, dispelling concerns from investors that high dividends might not be sustainable over time.
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The strong performance of AT&T and T-Mobile over the past 12 months is notable, with T-Mobile witnessing a staggering 62% increase and AT&T following closely with a 58% hike. Meanwhile, Verizon struggles with a mere growth of less than 17%. T-Mobile continues to attract new postpaid phone subscribers at an unmatched pace, a testament to the legacy left by former CEO John Legere, despite Mike Sievert now at the helm.
Despite AT&T's recent challenges, the company has showcased an encouraging turnaround with a robust fourth-quarter report, highlighting 482,000 net postpaid phone additions and the industry’s lowest churn rate at 0.85%. Likewise, Verizon has also reported strong additions of 568,000 net postpaid phones, up from 449,000 in Q4 2023, benefiting from a strong yield that provides stability.
Investors looking for high growth may find T-Mobile particularly appealing, while those interested in current stock trends might consider AT&T due to its newly established uptrend. On the other hand, Verizon remains an attractive option for long-term investors, especially with its solid dividend yield of over 6% as they await potential stock price appreciation.
