Image source: Sprint.

Most Americans are familiar with AT&T (T 0.69%) and Sprint (S). Collectively, the two telecom giants boast more than 190 million wireless customers. AT&T offers a network that's generally regarded as higher quality, but Sprint has been winning over customers with aggressive promotions. For smartphone users, the choice between the two companies may come down to several factors, including where they live and how much they're willing to spend.

But what about investors? For those seeking to add a telecom to their portfolio, Sprint and AT&T are two of the more compelling choices. Although the firms are fierce rivals, their businesses are quite varied, and each offers investors a different profile.

Yielding almost 4.5%

AT&T is a fairly standard telecom stock. Perhaps its most notable feature is its attractive dividend: At current levels, AT&T is yielding around 4.47%. Even excluding its commitment to return capital to shareholders, AT&T has been a solid investment in recent months -- shares of the Dallas-based company have risen nearly 24% in the last year, strongly outperforming the broader S&P 500.

AT&T shareholders have benefited from a string of fairly strong earnings reports. In April, the company turned in a report that exceeded analyst expectations. Last quarter, it added more than 800,000 branded smartphones to its network as its free cash flow rose more than 11% year-over-year.

Last year, AT&T successfully closed its acquisition of satellite TV provider DirecTV, and the integration between the two firms appears to be going well. AT&T has added nearly 1 million net satellite customers since last July, and on the company's most recent earnings call, CFO John Stephens characterized its joint offerings (DirecTV service paired with AT&T wireless) as a success, noting that the company has more than 5 million bundled customers. Later this year, AT&T plans to launch an Internet-based television service, DirecTV Now, that could appeal both to cord-cutters and those who can't get satellite reception.

Competition in the wireless business has intensified, but AT&T's margins have remained robust. Last quarter, AT&T's EBITDA and service margins soared to record highs. AT&T cited fewer smartphone upgrades to explain the improvement.

Bankruptcy averted?

Sprint is far less orthodox, and its business appears to be in a much more precarious state. Nevertheless, Sprint stock could outperform AT&T's in the quarters to come; it already has over the last 12 months. Sprint shares have risen a stunning 82% since last July, with much of that gain coming within the last month.

The last decade hasn't been kind to Sprint, with the wireless giant losing millions of customers and posting regular quarterly losses. Sprint's long-term debt has ballooned to upward of $31 billion. That's led some investors to project a bankruptcy filing in Sprint's future -- the stock was trading below $3 per share earlier this year. But Sprint's most recent earnings report weakened the bear case.

Its turnaround campaign appears to be succeeding. Sprint added more postpaid phones on a net basis last quarter than it has in nine years, and its postpaid phone churn was the lowest in its history. Sprint's network is often viewed as the worst of the major U.S. wireless providers, but it's made improvements in recent months. Meanwhile, it's reached out to consumers with aggressive advertising campaigns and promises of sharply reduced phone bills. Sprint's management also boasted of nearly $11 billion worth of liquidity, and projected adjusted free cash flow around break-even for the full-year.

Unlike AT&T, Sprint has no television or hardline operations, and it pays no dividend. But Sprint is a cheaper stock based on many metrics. Its price-to-sales ratio of 0.76 is less than half of AT&T's 1.6.

AT&T is the more traditional telecom

If you're looking to add a telecom stock to your portfolio, AT&T appears to be a solid pick. It pays an attractive dividend, and has a fairly predictable business. Internet video and more aggressive bundled promotions give it an opportunity for growth.

Sprint, on the other hand, is clearly the riskier pick. With its debt load and history of poor performance, a disappointing quarterly report could send shares tumbling. However, if Sprint CEO Marcelo Claure's turnaround campaign continues to succeed, Sprint shares could be headed much higher.