Over the past year, many higher-growth stocks tumbled as rising interest rates and other macro headwinds drove investors toward more conservative investments. That rotation caused the S&P 500 to enter a bear market in June, and it still isn't out of the woods yet.

As that market malaise drags on, investors should focus on resilient dividend stocks instead of speculative growth plays. They should also ideally invest in firmly profitable companies that trade at multiples that are lower than the S&P 500's forward price-to-earnings ratio of 17.

Faced with all these challenges, many investors might consider taking a closer look at the telecom giant Verizon (VZ -0.66%). But is this blue-chip stalwart really a worthwhile investment right now? Let's review four reasons to buy Verizon -- and one reason to sell it -- to determine if it's a good bear market buy.

A person looks at a smartphone.

Image source: Getty Images.

1. Its market leadership and scale

Verizon hosted 114.6 million wireless retail connections at the end of the second quarter of 2022, which makes it the largest wireless carrier in the U.S. T-Mobile (TMUS 0.15%) ranked second with 110 million wireless customers in the second quarter, followed by AT&T's (T -0.61%) latest tally of 107.3 million wireless subscribers (excluding connected non-handset devices).

Verizon's market leadership and scale arguably make it a more stable investment than its rivals, since it can spend less cash on aggressive marketing campaigns or the expansion of its 5G networks.

2. A clearer focus than its two main rivals

Verizon also operates a simpler business model than both AT&T and T-Mobile. While AT&T bit off more than it could chew with the misguided and debt-fueled expansion of its pay TV and media businesses, Verizon only took baby steps into the media and digital advertising sector with its smaller acquisitions of Yahoo and AOL. It sold both of those struggling businesses last year.

Verizon also isn't digesting and integrating a massive merger, as T-Mobile is still doing with its merger with Sprint from more than two years ago. That mega-merger enabled T-Mobile to surpass AT&T as the country's second-largest carrier, but it also caused numerous staffing and customer service issues.

AT&T recently reset its business with its recent spin-offs of DirecTV and WarnerMedia, but investors who are looking for a more streamlined telecom play could still gravitate toward Verizon instead of its rivals. 

3. Stable earnings growth and a low valuation

Verizon's adjusted earnings per share (EPS) grew 2% in 2019, rose another 2% in 2020 (even as the pandemic curbed its wireless growth), and jumped 10% in 2021 as consumers bought new 5G devices. For the current year, Verizon expects its adjusted EPS to decline 3%-5% as its core wireless business faces tougher inflationary and competitive headwinds.

That near-term outlook is disappointing, but Verizon's stock already trades at less than nine times forward earnings. That low valuation should limit its downside potential in this value-oriented market.

4. A dependable dividend

Verizon has raised its dividend every year for 15 straight years. It currently pays a forward dividend yield of 5.8%, which is nearly double the 10-year Treasury's closely watched yield of 3%. That high yield should make it an attractive investment for income-oriented investors. 

The one reason to sell Verizon: AT&T is a better buy

Verizon looks like a good all-around defensive stock, but it doesn't hold up well when compared to the "new" AT&T. In its latest quarter, AT&T predicted that its adjusted EPS would actually grow 0%-2% for the full year, even as it faced many of the same inflationary and competitive headwinds as Verizon.

AT&T's stock also looks cheaper than Verizon at a mere seven times forward earnings, and it pays a higher forward dividend yield of 6%. AT&T might be trading at a discount to Verizon because some investors doubt it can hit its rosy post-spinoff targets, but I believe it looks like a better buy right now.

Verizon isn't worth buying right now

Verizon's business is stable, but I believe it will continue to tread water in this market for at least the next few quarters. Its downbeat guidance suggests it could be struggling to fend off AT&T and T-Mobile, and its low valuation and high yield can't mask those unfavorable comparisons. So for now, investors should avoid Verizon and stick with other cheap dividend stocks to ride out this choppy market.