Apr 10, 2019

QoD: AT&T vs. Verizon: Which has been the better performing stock over the past five years?

Tired of those annoying TV ads comparing networks? Well it's about to get worse...a lot worse!!!

With 5G launching on April 11th, here's a look at how the two major wireless carriers have fared over the PAST five years. What do you think the future holds? 

Answer: Verizon

Questions:

  • Why do you think Verizon has performed better than AT&T since January 2018? 
  • How do you think these two companies make their money? What is the key metric to the health of their businesses? 
  • This chart has each of the company stock prices indexed to 100 in April 2014 to provide an easier comparison. Based on the data above, has AT&T been a good investment if you bought and held over the past five years? Provide numerical evidence to support your answer.

Here's the ready-to-go slides for this Question of the Day that you can use in your classroom.

Behind the numbers (from Yahoo Finance):

The Apr. 11 launch will bring 5G only to select areas of Chicago and Minneapolis. Nonetheless, that will make VZ the first company to bring 5G wireless service to the market. It also places pressure on peers AT&T and T-Mobile (NASDAQ:TMUS) to play catch-up. But first-mover advantage is not the only key difference between VZ and its longtime peer, AT&T. As with 3G and 4G, Verizon will use a version of connectivity that will differ from its peers.

**Want to try this at home?

  1. Pull historical stock information from Yahoo Finance for 5 years for each company and drop in Google sheet.
  2. Using the Adj. Close column (which accounts for dividends), index the first day in the series to 100. How? Divide each of the adj. stock prices by that first's day stock price. 
  3. Then arrange three columns with one being date, second being AT&T stock prices indexed to first day in the series and the third for Verizon's indexed stock prices.
  4. Highlight those three fields, and Insert>Chart and voila you have the stock comparison chart you see above. 

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About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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