Monday, February 21, 2011

Dividend Machine AT&T, symbol T

Dividend Machine AT&T, symbol T is number fourteen of the fifty-two companies I will profile for inclusion in your income investment portfolio. 

I think everyone knows that AT&T is a huge provider of telecom services. Everyone also knows that a lot of competition for telecom services exists and a lot of innovation affects how these stocks perform. However, few will complain about the income investors get from owning T.

No dropped calls here. AT&T pays $.43 per share each quarter and has increased that dividend every year for the last five years. Folks, this is a dividend machine. The yield is over 6% and the debt to equity ratio (D/E) ratio is only .65. AT&T's annual earnings per share are $3.35 and are ever increasing. Since AT&T pays out $1.72, the payout ratio is only 51% of earnings.  At&T closed at $28.57 on Friday.

I have looked at Verizon (V) and other telecoms like Century (CTL) but as a dividend machine, each one is a less attractive choice for income investors. CTL does not have the solid balance or the increased earnings that "telephone" enjoys. Verizon is on my watch list as a potential dividend machine but it pays out more than it earns. As you income investors know, we do not buy companies that pay out more than they earn.

We buy earnings not technology and Telephone is an excellent consideration to be included in your cash flow strategy.

Very Truly Yours,