AT&T paid around $1.8 as dividend in last 4 quarters on an EPS of around $2.35 resulting in a dividend payout of more than 75%. AT&T's track record of divided payment has been extremely good with an annual increase in dividend payout of around 2.85% since past 5 years.
At $36 the dividend yield of AT&T (T:US) looks quite attractive at around 5% when compared with 10 year T-Bill yield of 2.5%, but the 5 year historical chart of the stock's dividend yield tells a different story. While in absolute term it might look attractive but when compared with it's historical yields it doesn't seem to be that great.
At $36 the dividend yield of AT&T (T:US) looks quite attractive at around 5% when compared with 10 year T-Bill yield of 2.5%, but the 5 year historical chart of the stock's dividend yield tells a different story. While in absolute term it might look attractive but when compared with it's historical yields it doesn't seem to be that great.
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| AT&T Dividend Yield Chart for 5 years |
The above chart clearly suggest that the stock bounce up when the dividend yield goes above 6.0 percent and comes down when the yield is sub 5%. So technically the stock has a potential downside of 10% or more after which the dividend yield will start becoming compelling at around 5.75 % considering a 3% jump in dividend payout year on year.
The recent trend in prices also suggest that the weakness in stock which fell from $39 on 23rd April to $34 on 20th June, a fall of around 13% in 2 months, only to bounce back recently with the market and currently trading at around $36.
As evident from the chart below, the stock has significant support in $31 - $33 range and one can target to accumulate the stock in this range.
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| AT&T 3 Years Chart |
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