AT&T Inc. (T): 2019 Top Picks' Mid-Year Update

07/19/2019 5:00 am EST

Focus: TELECOM

Ben Reynolds

CEO, Sure Dividend

Ben Reynolds selected AT&T Inc. (T) as his favorite investment for 2019. The stock rose 17.4% in the first half of the year. Here's the latest update on the telecom giant from income expert and editor of Sure Dividend.

AT&T is a highly attractive dividend stock, thanks to its high yield above 6% and its impressive streak of dividend increases. The company has increased its dividend each year for 35 consecutive years.

This places AT&T on the exclusive list of Dividend Aristocrats, a group of 57 companies in the S&P 500 Index with at least 25 consecutive years of dividend increases.

There should be plenty of dividend increases in the years ahead, as AT&T is making a huge investment in growth through the $85 billion acquisition of content giant Time Warner Inc. The acquisition gives AT&T access to a host of popular media brands, including TNT, TBS, CNN, and HBO.

Time Warner also owns a movie studio as well as sports rights across the NFL, NBA, MLB, and NCAA. This is a transformation acquisition for AT&T, as it broadens the company’s service offerings beyond telecommunications.

AT&T will be a major player in content, which is very valuable for the company as it provides a competitive edge over other telecommunications providers and gives it a hedge against rising content costs. AT&T expects to generate earnings-per-share of $3.60 in fiscal 2019.

With an expected dividend payout ratio of 57% for 2019, AT&T should continue to raise its dividend modestly each year. AT&T has a secure dividend payout, a high yield above 6%, and has increased its dividend each year for over three decades. These qualities make AT&T a highly attractive dividend stock for retirees.

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