Better Buy: AT&T vs. American Tower

When it comes to high-yield but stable dividend payments, AT&T (NYSE: T) is a solid option. The company's acquisition of Time Warner (now the company's Warner Media group) was a high price tag that racked up significant debt, and the media business is now in decline due to the economic lockdown to halt the spread of COVID-19. Nevertheless, the bread-and-butter telecom segment is a stable staple service and is generating just enough cash flow to support the stock's current 6.5% annual yield.

For investors looking for income, then, American Tower (NYSE: AMT) may get overlooked. The real estate investment trust (REIT) for telecom operations (180,000 sites globally) only pays a 1.7% yield after raising its payout 20% from 2019. However, while it too makes use of debt to expand, American Tower is getting much more bang for its buck than AT&T has and expects to generate some profit expansion in the year ahead. It's a tough call as to which is the better buy, but simply using dividend yield as a deciding factor won't work as the 5G mobile network upgrade cycle gets under way.

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Source Fool.com