Whoa! Not a REIT? That’s right! I purchased a boring stodgy telecom for my after-tax dividend growth portfolio.
REITs have started 2018 with a bang rising ~12% with investors seemingly seeking safety and security. With that run up though, I could not find any suitable REITs that were fairly valued or had a dividend that matched my income expectations given the risk.
AT&T has been on my radar for a little while now. It has been trounced over the last year, likely due to the amount of debt they took on to purchase Time Warner. With the decline in stock price, yields reached 7%. AT&T is an aristocrat with 34 years of growing dividends and with a low payout ratio, the dividend does not appear to be at risk of a decrease any time soon. In fact, AT&T just raised their dividend by $0.01 in January to $0.51 per share per quarter. AT&T is large and won’t grow its dividend quickly, but it generates gobs of cash flow that can be used to either increase their dividend or invest in growth opportunities.
If you haven’t already, sign up for to receive the free Sure Dividend newsletter. My confidence in purchasing AT&T was supported by some of the research that was presented. See their excellent research report here.
Also check out the money mindset post on how to get AT&T to pay for your cell phone bill!