- AT&T (NYSE:T) is a dividend stalwart, yielding 5.7%, but Morningstar DividendInvestor Editor Josh Peters dropped it from his model portfolio in favor of lower-yielding Verizon (NYSE:VZ).
- He's willing to swap for Verizon's 4.5% yield because the "quality, the safety of the dividend, and the growth of the dividend and the total return it will drive are superior."
- He lost some patience with AT&T's wandering outside of core business rather than sticking to its knitting and growing the dividend faster than 2%. Verizon is focused on U.S. wireless with better capital allocation, he says.
- Coverage plays a part as well: "Verizon is covering its dividend 1.5 times with free cash flow. AT&T is just barely covering its dividend now with free cash."
- Josh Peters video interview