Verizon Communications (VZ -0.20%) continued to post strong subscriber growth in the fourth quarter, helping lift the stock. However, the stock has nonetheless traded lower over the past year.

With an attractive forward dividend yield of about 6.7%, the question is whether now is a good time to buy the stock. Let's take a closer look at its most recent results to find out.

Wireless subscriber growth leads the way

Verizon's wireless business continues to be its biggest contributor, with revenue rising 3.1% year over year to $20 billion. Impressively, it was the 18th straight quarter of sequential revenue growth. The company added 568,000 total postpaid net additions in the quarter, including 426,000 wireless retail postpaid phone net additions. It said Q4 had its biggest postpaid phone gross additions in five years.

The company's broadband segment also continues to perform well, with total net additions of 408,000. It ended the quarter with 12.3 million total broadband subscribers, a 15% increase compared to last year. It added 373,000 fixed wireless subscribers, and 51,000 net Fios subscribers.

Verizon's prepaid business continues to be under pressure due to the end of the Affordable Connectivity Program, which helped subsidize internet services. It lost 66,000 customers in the quarter. Excluding Safelink, which catered to the program, it added 65,000 prepaid customers.

Verizon Business revenue, meanwhile, slipped 1.5% to $7.5 billion. Business wireless revenue rose 3.4% to $3.5 billion, as the company added 283,000 wireless retail postpaid net additions. However, it continues to churn off business wireline subscribers.

Overall wireless equipment revenue, meanwhile, edged up 0.6% to $7.5 billion.

Verizon's total revenue was up 1.6% year over year to $35.7 billion, while its adjusted earnings per share (EPS) edged up from $1.08 a year ago to $1.10. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) rose 1.7% to $11.9 billion.

Looking ahead, Verizon forecasts full-year 2025 wireless revenue growth of between 2% and 2.8%. It expects adjusted EPS to grow by 0% to 3% and for adjusted EBITDA to grow between 2% and 3.5%. The company is projecting operating cash flow of between $35 billion and $37 billion after spending about half of that on capital expenditures (capex) to result in free cash flow between $17.5 billion and $18.5 billion.

The company also introduced an artificial intelligence (AI) strategy called Verizon AI Connect, a suite of products designed for businesses to manage AI workloads at scale. It currently has partnerships with Alphabet and Meta Platforms.

Image source: Getty Images.

A well-covered dividend

With a high yield, one reason many investors are attracted to Verizon is its dividend. On that front, the dividend is well covered. In 2024, the company paid $11.2 billion in dividends, while it generated $19.8 billion in free cash flow. That's good for a nearly 1.8x coverage ratio, which gives the company plenty of room to continue to increase the payout.

Verizon's balance sheet also remains in good shape with a leverage ratio on unsecured debt (net unsecured debt/trailing-12-month adjusted EBITDA) of 2.3.

Based on Verizon's projection of $17.5 billion to $18.5 billion in 2025 free cash flow, it should continue to be able to raise its dividend next year and beyond.

Is the stock a buy?

Verizon has done very well adding postpaid wireless and broadband subscribers over the past year, but its stock has been stuck in neutral. At the same time, the company is generating a ton of cash that allows it to pay its robust distribution, pursue growth opportunities, and pay down debt.

Looking at valuation, Verizon trades at a forward price-to-earnings (P/E) ratio of 8.3 based on 2025 earnings estimates, which is below the nearly 11 times multiple of AT&T.

VZ PE Ratio (Forward 1y) data by YCharts

Historically, Verizon has traded at a premium to AT&T and the current wide valuation gap between the two in favor of AT&T does not seem justified in my view.

The two companies have been performing similarly, but AT&T's stock has greatly outperformed Verizon's. For its Q4, AT&T grew its total revenue by just 0.9%, while its adjusted EPS was flat.

However, investors like that AT&T plans to buy back shares and finally raise its dividend after keeping it steady since cutting it in half in 2022 in conjunction with its WarnerMedia spin-off. That's good for AT&T investors, but the two companies are performing pretty similarly from an operational standpoint.

As such, I prefer Verizon and think it is currently the better buy.