Recession fears are gripping markets in 2025, with investors seeking safe havens assets that promise resiliency and steady returns. Dividend stocks, especially from industries that are critical to national infrastructure, such as telecommunications, are emerging as go-to picks for income portfolios.

Two industry behemoths, AT&T (T) and Verizon (VZ), are in the spotlight thanks to their strong performances and attractive yields.

AT&T started 2025 off with incredible momentum, gaining 1.7 million postpaid subs and enjoying an 19.5% stock increase in the year to date that has outperformed the S&P 500 Index ($SPX) dramatically. Verizon is keeping up with its stellar 6.1% dividend yield backed by steady cash flows that are resilient in the worst of economic times.

Both operators are using key services such as broadband and wireless connectivity, a must-have for consumers and end-users alike, to preserve their defensive advantage.

AT&T and Verizon could be your safest bets to ride out a potential 2025 recession. Let’s find out.

Dividend Stock #1: AT&T (T)

AT&T (T) is a major provider of wireless, broadband, and fiber services. It is shaping up to be one of the best dividend stocks for investors concerned about a potential recession in 2025. It currently offers a forward dividend yield of 4.1%, supported by an annual payout of $1.11 per share.

This reliable dividend is backed by AT&T’s $17.6 billion in free cash flow for 2024, marking a $0.9 billion year-over-year increase. The company’s stock performance has also been impressive, up more than 19% in the year to date and up nearly 67% over the past 52 weeks. 

AT&T’s recent earnings report showcases its ability to support dividends even during tough times. In 2024, it reported revenues of $122.3 billion, adjusted EPS of $2.26, and adjusted EBITDA of $44.8 billion. 

Operationally, AT&T added 1.7 million postpaid phone subscribers and achieved 1 million fiber net adds for the seventh consecutive year, highlighting its strength in critical areas like 5G and broadband — services that remain essential regardless of economic conditions.

Looking ahead to 2025, AT&T projects mid-teens growth in consumer fiber revenue and adjusted EBITDA growth of at least 3%, along with free cash flow exceeding $16 billion. Its first-quarter earnings report, scheduled for April 23, 2025, will offer further insights into its progress this year, with analysts expecting adjusted EPS of $0.49 (up 5.21% year-over-year) and revenues of $30.36 billion (up 1.11%).

AT&T remains attractively valued with a trailing P/E ratio of 11.68x, well below industry averages. Analysts have given it a consensus “Moderate Buy” rating with an average price target of $27.96, roughly inline with its current share price. 

Dividend Stock #2: Verizon (VZ)

Verizon Communications (VZ) is another major provider of wireless, broadband, and fiber-optic services. It offers a forward dividend yield of 6.1%, supported by an annual payout of $2.71 per share. This dividend strength is backed by Verizon’s robust free cash flow, which reached $19.8 billion in 2024, up from $18.7 billion the year before.

Verizon’s stock has gained 10.8% year-to-date and 11.5% over the past 52 weeks, showing steady investor confidence. Its valuation is appealing, with a trailing P/E ratio of 9.35x and a forward P/E ratio of 9.15x, making it attractively priced compared to sector peers.

Verizon’s 2024 earnings demonstrated its operational strength, with revenues hitting $134.8 billion, driven by $20 billion in wireless service revenue during Q4 alone. Adjusted EPS for the year stood at $4.59, slightly lower than $4.71 in 2023. The company added nearly 1 million postpaid subscribers in Q4 — its best quarterly result in over a decade — highlighting its ability to attract and retain customers despite growing competition.

Looking ahead to 2025, Verizon projects wireless service revenue growth between 2% and 2.8%, adjusted EBITDA growth of between 2% to 3.5%, and free cash flow ranging from $17.5 billion to $18.5 billion — figures that reinforce its ability to support dividends while investing in strategic initiatives. 

With reliable dividends, strong financials, and strategic growth initiatives, Verizon remains a solid choice for investors seeking stability during uncertain times in 2025. Analysts have assigned it a consensus “Moderate Buy” rating with an average price target of $46.87, implying upside potential of approximately 5% from current levels.

Conclusion

Both AT&T and Verizon demonstrate strong potential as recession-resistant investments for 2025, combining reliable dividends with essential services and strategic growth initiatives. If you’re betting on a downturn, these telecom giants could offer the stability and income your portfolio needs. While AT&T’s aggressive fiber expansion suggests growth potential, Verizon’s high dividend yield and innovative partnerships provide steady appeal. Given their solid fundamentals, shares for both are likely to trend upward, especially as demand for connectivity remains indispensable.