Cramer Reiterates a ‘Buy’ on AT&T, Verizon

AT&T and Verizon Communications may be flirting with their 52-week highs, but considering the widespread use of these wireless providers, Jim Cramer thinks both stocks are relatively cheap and should be bought.

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The "Mad Money" host reaffirmed his bullish stance on both stocks after recently interviewing each company's CEO at CTIA Wireless, the U.S. cellphone phone industry's annual trade show.

With Verizon , investors get one-half of a wireless company, as Vodafone Group owns the other half. Cramer thinks this business has multiple years of growth ahead of it, though. He expects a majority of subscribers will upgrade to its heavily subsidized smartphones within the next 12 months, which will likely result in considerable margin expansion.

No Huddle Offense: Cramer 'Smitten' with AT&T and Verizon   

In addition, Verizon has developed other ways to generate sizable amounts of cash without a ton of investment. Cramer cited its Fios network for high-speed internet and landlines as examples.

Investors in AT&T get its entire wireless business. Additionally, AT&T has already paid the price to subsidize its subscribers’ migration to smartphones.

Cramer said both AT&T and Verizon share a lot of desirable traits, too. Each company exhibits consistent growth, expanding gross margins and absolutely no exposure to Europe, which still struggles with its ongoing debt crisis.

Also, both AT&T and Verizon pay “monster” dividend yields of 5.3 percent and 4.9 percent respectively. Thanks to a steady increase in mobile phone usage coupled with higher fees, Cramer thinks both companies can afford to pay these dividends for a long time.

Read on for Cramer's Top Dividend Stocks


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