AT&T Inc. (T) just declared $0.50 quarterly dividend. This is an increase of 2.0% from $0.49.
I own 148 shares, so this will increase my annual dividend income by $5.92 to $4,585.34
In the month of October and November, I was buying up AT&T like a madman. Before the month October, I did not own any shares of the company. The stock was always either fairly valued or a little overvalued for my liking. Whenever it was slightly in my buy zone, I never had the money because I would have invested in another company. However, I knew the time will come when ATT will hit my buy zone and I will just unload new capital into it. In just two months, I invested $5,147.46.
Now AT&T is a core holding in my portfolio and it will produce $296 a year in passive income for me. This dividend increase is exactly what I expected and wanted. I am super happy with the increase. I see the company continue to increase it at this rate. They currently have a dividend payout ratio of 92.8%. This ratio is extremely and dangerously high; however, analysts predict and so do I that AT&T will increase earnings at a 3% rate for the next three years.
I have a fair price of $39.56 which means that AT&T is 3.3% undervalued. AT&T is slightly undervalued to fairly value, and I recommend it as a HOLD at this time.
Liking the dividend increase? Want to own more shares of AT&T?
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