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AT&T: A Fortress Stock

01/01/2016 8:00 am EST


Bryan Perry

Editor, Cash Machine, Premium Income, Quick Income Trader, Instant Income Trader

Assuming a slower growth rate for the global economy that will weigh on GDP growth, it’s my view that taking a position in the broader utility sector at a deep discount is a timely opportunity, suggests Bryan Perry, income expert and editor of Cash Machine.

In a market beset by uncertainty, some things in your everyday life are quite certain, like using your phone, having cable TV, and using data and wireless telecom services.

Our latest recommendation is a fortress stock. Regardless of economic conditions, consumers will continue to light up the wire lines and networks at AT&T (T).

Voice, text, and data transfers are now almost as vital to people’s existence—and the ability to function on a daily basis—as oxygen and water are in today’s society.

As America’s largest telecommunications company and having recently closed on the acquisition of satellite television provider DirecTV, AT&T has a blue chip dividend yield of 5.55%.

As of the end of the third quarter, the company served 120 million wireless customers and just became the largest pay-television provider in the world.

The company now provides service to more than 45 million subscribers in the United States, Latin America, Mexico, and the Caribbean.

The DirecTV acquisition significantly diversifies AT&T’s revenue mix, products, geographies, and customer bases.

Wall Street is forecasting earnings of $2.82 per share next year on a 14.3% increase in top-line revenue to $170 billion.

The company has beaten earnings estimates for four straight quarters and another outperformance for the fourth quarter should lift the stock to challenge the 2013 high of $39, my price target.

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