Dividends4Life: AT&T Stock is Still a Dividend Machine

AT&T Stock is Still a Dividend Machine

Posted by D4L | Tuesday, March 03, 2015 | | 0 comments »

After digging through AT&T Inc.’s (NYSE:T) quarterly earnings report, my overall thoughts on the company were once again confirmed; share price appreciation will continue to be minimal moving forward, but AT&T stock may still deserve a spot in your portfolio simply because of its 5.7% dividend yield. The good news for AT&T stock is that earnings per share came in at a loss of 77 cents, but when adjusted for one-time items, EPS hit a positive 55 cents, beating estimates by a penny and scoring 2 cents higher than the same quarter last year.

The not-so-good news was that increased competition within the industry hurt AT&T earnings during the quarter, causing profit margins to fall from 42% to 36.7% in a year. Customer defections rose to 1.22%, up from 1.11%, and postpaid average revenue per user dropped 10.7% on a year-over-year basis. In the short term, the slow growth and minimal share price appreciation makes AT&T stock look like a poor investment. But, when you consider AT&T is an extremely safe blue-chip stock, combined with its high-yielding dividend and management’s commitment to protecting the dividend, it’s hard to see how investors can go wrong with owning AT&T stock.

Source: InvestorPlace

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