Telecom Titans AT&T and Verizon Stage a Comeback

• AT&T and Verizon are showing renewed strength after underperforming for years.
• Strategic refocusing and subscriber growth are driving positive sentiment.
• Shareholder-friendly moves, including dividends and buybacks, enhance attractiveness.
• Technical analysis suggests potential for further gains in both stocks.

A Telecom Resurrection

The economic winds, much like the swirling fogs of London, can often obscure the true path. Lately, investors, spooked by weak hiring and corporate layoffs, are seeking refuge in the familiar harbors of defensive stocks. Among these, AT&T and Verizon, once relegated to the back benches, are now stepping into the limelight. As I often say, "Data! Data! Data!" I can't make bricks without clay. In this case, the data suggests a re-evaluation is in order.

From "Dumb and Dumber" to Strategic Savvy

Ah, the follies of man are as predictable as the sunrise. AT&T's ill-fated dalliance with Time Warner and Verizon's bewildering acquisitions of AOL and Yahoo! these were blunders of epic proportions. Years of cash flow, vanished like smoke in the wind. But even the densest fog eventually dissipates. AT&T now refocuses on its core strengths: communications and fiber optics, positioning itself for the age of AI. Meanwhile, Verizon boasts impressive subscriber numbers, signaling an end to its costly price war. Those seeking insights into market stability may find the piece Powell Probe Stalls Fed Nominee Showdown relevant as it relates to leadership and financial security. "It has long been an axiom of mine that the little things are infinitely the most important."

The Modern Essential: Mobile Connectivity

Consider this: in these straitened times, what does the modern consumer sacrifice last? Their automobile? Perhaps. Their credit card payments? Possibly. But their mobile phone? Never. It is the umbilical cord to modern life, and thus, these telecom giants possess a resilience that transcends economic downturns. "The game is afoot," and the game, in this case, is a flight to safety.

Verizon's Vindication: A Deep Dive

Verizon's recent performance is nothing short of remarkable. A massive surge following their year-end report, fueled by robust phone net-adds under the new CEO, Dan Schulman. Full-year operating revenue climbed to $138.2 billion, with adjusted EBITDA reaching a solid $50 billion. Their strategic acquisition to expand fiber access further solidifies their position. As I am known to say, “It is a capital mistake to theorize before one has data." In this instance the data speaks volumes.

AT&T's Ascent: A Technical Perspective

AT&T, not to be outdone, mirrored Verizon's post-earnings jump. Strong free cash flow alleviated dividend sustainability concerns, and surprisingly, growth is now on the horizon. Net phone and fiber adds paint a picture of resurgence. The golden cross last week signals short-term momentum outpacing the longer-term trend. “Elementary, my dear Watson.” The stock is coiling below resistance, poised for a potential breakout.

Shareholder Focus: Dividends and Buybacks

Both Verizon and AT&T are demonstrating a renewed commitment to their shareholders. Verizon authorized a substantial $25 billion share repurchase program and increased its annual dividend for the 20th consecutive year. AT&T returned over $12 billion to shareholders through dividends and buybacks, projecting double-digit adjusted EPS CAGR through 2028. Such actions are most illuminating to any rational investor.