Telecom titans AT&T (T 0.21%) and Verizon Communications (VZ -0.42%) make attractive investments given their high-yield dividends, both around 7% at the time of this writing. Shares are also well off their 52-week highs, providing a good opportunity to buy.

Certainly, 2023 delivered ups and downs for these two wireless carriers. Both were embroiled in controversy over the summer after news broke of lead-sheathed cables in their telecommunications networks. This stirred up concerns over potential liability, which caused their stocks to sink.

The lead issue now appears put to rest since tests showed no signs of health risks. And after both companies delivered solid third-quarter results, things are looking up. In fact, Verizon stock shot up more than 9%, its best day in nearly 15 years, after the company reported earnings on Oct. 24.

But if you had to choose just one, would AT&T or Verizon prove the more compelling investment? It's not a straightforward answer. Each possess different pros and cons that investors should weigh before deciding which to invest in.

Let's examine both companies to determine if one is a better investment.

The case for AT&T

AT&T underwent a business transformation in recent years. It completed the divestiture of its massive entertainment holdings last year, allowing the company to focus on its telecommunications business.

This business is thriving. In the third quarter, the company gained a net 468,000 in its postpaid phone subscriptions, the telecom industry's most valuable customer segment. This represents 13 straight quarters of customer growth.

AT&T's expanding customer base contributed to the company's Q3 mobile service revenue reaching $15.9 billion, which represents nearly 4% year-over-year growth. This was a key contributor to AT&T's mobile division reaching sales of $20.7 billion, an all-time high for the segment.

AT&T's rising revenue and customer count aren't the only areas of growth. The company's capital investments in its 5G network are winding down this year, enabling AT&T to generate higher free cash flow (FCF), an important factor in funding its dividend.

The company's Q3 FCF of $5.2 billion was $1.3 billion higher than the prior year. This strong result enabled AT&T to forecast FCF of $16.5 billion for the full year, which would easily exceed its 2022 FCF of $14.1 billion.

Verizon's pros and cons

Like AT&T, Verizon's Q3 revealed some excellent results. The company's postpaid phone net additions for the quarter totaled 100,000, far exceeding the 8,000 gained in Q3 2022.

Despite the customer growth, Verizon's Q3 revenue dropped from the prior year's $34.2 billion to $33.3 billion due to a decline in equipment sales and upgrades in its postpaid customer segment.

Verizon's year-over-year drop in Q3 revenue is understandable given the inflationary environment of the past year, which can influence customers to reduce spending on discretionary items, such as a new mobile phone, in the short term. Yet even with the drop, Verizon's Q3 revenue of $33.3 billion still eclipsed AT&T's Q3 sales of $30.4 billion.

Moreover, Verizon's Q3 FCF was $6.7 billion, and through three quarters, reached $14.6 billion. This total already exceeds the $14.1 billion generated in all of 2022. As a result, Verizon raised its 2023 FCF forecast by $1 billion to $18 billion.

This FCF increase indicates Verizon's dividend is secure. In fact, the company raised its dividend for the 17th consecutive year in September, the longest streak in the telecom industry.

Deciding between AT&T and Verizon

As the two largest U.S. telecom carriers based on wireless subscriptions, AT&T and Verizon offer compelling reasons to invest. But let's face it: Both are mature businesses unlikely to suddenly become growth stocks despite the advent of 5G networks.

So these stocks are more of an income investment. And while AT&T shares offer a hefty dividend yield, the company hasn't raised its dividend since cutting it almost in half last year as part of AT&T's decision to divest its entertainment holdings.

Meanwhile, Verizon possesses a long history of dividend increases, and its 2023 FCF is expected to be significantly higher than AT&T's. Through the lens of an income investor, these factors make Verizon the better buy at this time.