Get out your hard hats, picks, and shovels. Lights on? It's time to dig through the third-quarter results at Motley Fool Stock Advisor recommendation SBC Communications (NYSE:SBC).

On the surface, results look rocky. You have to read a dozen or more paragraphs before you discover that revenue increased 0.3% year over year. Income from continuing operations isn't any prettier, up a mere 0.1% (after all kinds of charges). Exclude the charges, though, and net income increased from $1.2 billion in the year-ago quarter to $1.5 billion this past quarter (that's net of hurricane and merger-related charges).

Let's dig deeper to see if we can unearth any diamonds. Cingular, the 60% owned joint venture with BellSouth (NYSE:BLS), is doing well. Sales were up 6.2%, and operating income was up 30.4%. Without charges for hurricanes and AT&T Wireless merger integration costs, earnings jumped 40.4%.

Dig a little deeper, and you'll see that SBC gained 867,000 net subscribers. That's down from 1.1 million last quarter, 1.4 million the quarter before that, and 1.7 million in last year's fourth quarter. That trend bears watching; cell phone growth might finally be cooling off.

On the other hand, cell phone churn (the number of subscribers changing services) fell from 3.2% last year to 2.3% this year. That's good news, reflecting that Cingular was able to slow the churn rate at AT&T Wireless after its acquisition.

On the landline side of the business, there were a number of excellent growth areas -- overall revenue growth came in at 0.4%. DSL lines grew 31%, data revenue advanced 10.1%, and long-distance lines increased 9.7%. But the number of traditional phone subscribers declined 5.1% to 50.2 million.

Net everything out, and revenue was virtually unchanged. Impressively, consolidated operating margins still increased 2.5 percentage points to 19%. While that margin pales next to Verizon's (NYSE:VZ) 24.2% trailing annual margins, it does show that SBC is finally getting its margins under control, with further room for growth.

SBC is not a big growth play. The company faces continual pressure in its consumer landline business. Customers' shift from traditional phone service to cellular phones is rendering its long-distance infrastructure increasingly worthless. In addition, increasing competition within the cellular realm, coupled with a rapid rate of innovation, may force SBC to cut prices on its wireless plans to stay competitive. Analysts see 6% annual growth over the next five years (about 4.5% less than the S&P 500).

The big attraction, other than investing at the heart of the telecommunications business, is the 5.8% dividend. Add it up: Improving margins, expected steady long-term growth, and a fat dividend could combine for a market-beating mother lode of a return on investment.

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Fool contributor W.D. Crotty owns shares in Verizon and SBC Communications. Click here to see The Motley Fool's disclosure policy.