Where does AT&T (T) rank after its 2% announced dividend increase?

AT&T Incorporated (T) announced a quarterly dividend of $0.49, a 2 percent increase from the prior rate of $0.48 per share. AT&T has delivered consistent divided increases over the past six years of over 2.2% per year. The current dividend yield stands at a large 5.3%, well above that of the S&P 500.

The firm has also maintained 31 consecutive years of annual payout increases. The firm qualifies as a dividend aristocrat. The firm’s stock maintains low volatility, with a beta of only 0.70.  The dividend will be paid at the new higher rate on February 1, 2016, to shareholders of record at close of business on January 10, 2016. AT&T Inc. is currently priced at $36.70. AT&T Inc. is a member of the top 100 dividend candidates.

top-100

Listed in the table below are the annual dividend payments since 2010. Our analysis of AT&T Inc. as a Top 100 Dividend Stock candidate is listed below;

Date Quarterly Dividend
1/10/2017 0.49
10/5/2016 0.48
7/6/2016 0.48
4/6/2016 0.48
1/6/2016 0.48
10/7/2015 0.47
7/8/2015 0.47
4/8/2015 0.47
1/7/2015 0.47
10/8/2014 0.46
7/8/2014 0.46
4/8/2014 0.46
1/8/2014 0.46
10/8/2013 0.45
7/8/2013 0.45
4/8/2013 0.45
1/8/2013 0.45
10/5/2012 0.44
7/6/2012 0.44
4/5/2012 0.44
1/6/2012 0.44
10/5/2011 0.43
7/6/2011 0.43
4/6/2011 0.43
1/6/2011 0.43
10/6/2010 0.42
7/7/2010 0.42
4/7/2010 0.42
1/6/2010 0.42

Analysis of AT&T Inc. is based upon our five key criteria for the Top 100 list, which include; 

Category Value Score
Dividend Yield 5.32% 28
Dividend Growth (3-6 year avg) 2.3%  353
Forward P/E 12.24  61
S&P Financial Rating BBB+  160
Beta 0.70  50
Total Score    652

Additional Information on P/S ratio and historical yield;

% Yield 3 Year Div. Growth Rate 6 Year Div. Growth Rate SPS 2016 P/S Ratio 10 yr P/S Low 10 yr P/S High 5 yr max Yield % 5 yr lowest Yield %
5.32% 2.2% 2.3% 26.95 1.36 0.99 2.25 6.13% 4.38%

Final Analysis;

  • AT&T’s dividend yield is above that of the S&P 500 Index and is on average with its historical dividend yield.
  • AT&T maintains a 3 year dividend growth rate of 2.2%.
  • AT&T has paid out a dividend consecutively for the past 32 years.
  • AT&T is trading at a low forward P/E ratio and at a low price/sales (P/S) ratio.  From a relative valuation perspective based upon P/S, AT&T is undervalued.
  • AT&T maintains a credit rating of BBB+. This is investment grade, a positive.
  • AT&T maintains a beta of 0.70, lower than the average company.
  • AT&T total ranking is 26.

Based upon its above average yield, low P/S ratio and low beta, AT&T Inc. qualifies as one of our Top 100 Dividend Stocks.

AT&T Inc. Dividend Yield Chart (Click to enlarge)

t2

Chart Explanation:  Dividend growth stocks may be viewed favorably when the current yield is above historical readings for the past 5 years.

Further information on dividend investing and evaluating dividend growth candidates can be found at http://seekingalpha.com/author/timothy-mcintosh/articles

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s