Top Dividend Stocks #1: AT&T (T)
Dividend Yield: 5.63%
YTD Performance: -6.9%
52-Week Return: -2.3%
AT&T (T) is the biggest telecommunications provider in the United States, with a market cap of $173 billion, and the company lags only Verizon in terms of mobile customers. T differs from some other dividend stocks in that it has great fundamentals.
In its fourth-quarter earnings release, AT&T reported earnings per share of 53 cents, which beat the consensus estimate by 3 cents — an upside surprise of 6%. The latest EPS reading was up from 44 cents during the same quarter a year ago, amounting to an increase of more than 20% year-over-year.
Late last year, the company’s CEO declared that “Returning value to our shareholders is one of AT&T’s top priorities.” In staying true to that statement, T repurchased almost $2 billion of its own shares in the fourth quarter, bringing its full-year stock buyback total to 366 million shares, or 6% of all outstanding shares.
The company sports a fat $1.84 annual payout, or a 5.55% yield at current levels, making it the highest yielder among Dow dividend stocks. As a result of its share repurchase program and steady quarterly dividend payments, AT&T was able to return $23 billion dollars to shareholders in 2013, and the stock should continue to reward investors this year through further earnings and revenue growth as well as increased dividend payouts.
Bryan Perry is the editor of Cash Machine, a newsletter focused on high-yield income investing with the goal of maintaining a blended total yield of 10% across two portfolios. Bryan is also the editor of Extreme Income, which uses the power of historically cheap money to create a leveraged “baby hedge fund” strategy that paves the way to massive profits and 4x greater income.