Dow Dividend Stocks #1: AT&T (T)
AT&T (T) stands out because, unlike some dividend stocks with above-average yields, it has great fundamentals. In fact, it’s the biggest telecommunications provider in the United States with a market cap of $178.5 billion, and lags only Verizon (VZ) in terms of mobile customers.
The company upped its quarterly dividend by a penny once again for 2014, to 46 cents from 45, which makes for a current yield of 5.5%. The announcement was made in a Dec. 13 press release, in which the company’s CEO reaffirmed that “Returning value to our shareholders is one of AT&T’s top priorities.”
T stock is expected to report earnings on Jan. 28, and analysts are looking for earnings 50 cents per share. The company’s last three earnings results have been roughly in line with estimates, and this time should be no different, as T recently announced that it is set to record a fourth-quarter pretax gain of $7.6 billion related to actuarial gains and losses on its pension and postemployment benefit plans.
The switch to “mark-to-market” pension accounting, which provides a more realistic view of the company’s current financial standing, should allow pension gains to be translated into earnings more quickly. Verizon got a boost on a similar announcement last week, and you can also expect a nice bump from this leader among dividend stocks.