February went by and I didn’t make a single purchase. So I thought I would make a new purchase early in March. I was considering several different opportunities. Several of my current holdings like General Mills and ExxonMobil are currently below my cost basis. Despite being below my cost basis those companies are already some of my larger holdings so I didn’t want to overweight those positions at this point. So I kept an eye on my watch list until I finally made a decision.
After a lot of consideration, I finally decided on buying a position in AT&T. The company hasn’t seen a lot of capital appreciation in the past few years but they don’t suffer from much volatility. So it has been a good dividend paying stock without a lot of ups and downs in the market. I don’t feel like I have many of these kinds of stocks in my portfolio. Most of the stocks in my portfolio suffer from some kind of volatility rather it be cyclical or just high trading volumes.
AT&T Stock Dividend Data
Annual Dividend: $2.00
Payout Ratio: 65%
Dividend Growth History: 33 years
Earnings Per Share: $3.45
PE Ratio: 7.78
Recap of Information on AT&T
As most people are aware, AT&T has been trying to seal the deal on a merger with Time Warner. To make this deal happen they will have to take on a lot more debt but I think it will be good to help them offset their decline in sales from people cutting the cord. If they can reach a an agreement with the Department of Justice I think this will be great for the company.
The possibility of AT&T to continue to be able to generate cash for their shareholders recently got better because they stand to gain around $3 billion dollars in cash flow during 2018 from the tax cut.
Recently they have announced an IPO for DirectTV Latin America which would be called Vrio Corp. With this deal AT&T will be able to generate some hard cash now while continuing to generate cash off of these assets in the future.
AT&T Impact on More Dividends
I added 12 shares of AT&T at an average price of $37.07. This addition to my portfolio will add $24.00 to my project annual dividend income not including the compounding factor.
I think AT&T makes a good fit into my portfolio. They should be able to generate steady income without a lot of volatility. If the merger with Times Warner goes through it may turn more into a growth stock but there are still a lot of hurdles to jump before that happens. I will continue to hold the stock and make additions when it drops below my cost basis as long as they continue to show promise for the future.
Have you recently purchased stock in AT&T? Do you currently own any shares of AT&T? If so I would love to hear about it.
As always I look forward to reading all of your comments and questions, until then….. happy investing!
-Jason from MoreDividends.com
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