Back to top

Analyst Blog

Leading telecom carrier, AT&T Inc. (T - Analyst Report) has raised its dividend by a cent from 45 cents paid previously. The growth marks a 2.2% increase in the company’s quarterly dividend payment. On an annualized basis, the dividend payment amounts to $1.84, up from $1.80.

The increased dividend is payable on Feb 3, 2014 to common stockholders of record on Jan 10, 2014. We believe that the recent dividend hike would strengthen investor confidence in the company’s financials and therefore improve its market position.

The company has the strongest balance sheet in the industry with net debt-to-adjusted EBITDA ratio of 1.76 times at the end of the third quarter 2013. It offers flexibility to invest in the business through both capital improvement and strategic acquisition, while returning substantial value to shareholders through attractive dividends and share repurchases.

In 2012, AT&T doubled its share repurchase authorization plan to 600 million shares. The company completed the initial 300 million-share buyback program last year. As of Sep 30, 2013, the company repurchased 55 million shares for $1.9 billion. At the end of the quarter, 216 million shares remained in the current authorization. Moreover, in Nov 2012, AT&T boosted its annual dividend by 2.3% to $1.80 per share, marking the 29th consecutive year of dividend hike.

During the reported quarter, the company returned approximately $2.4 billion to its shareholders through dividend payments. Overall, the company has spent nearly $18 million as shareholder returns until third quarter 2013.

We believe the company’s focus on building shareholder value will continue to grow as it expects strong operating results this year.

For 2013, AT&T expects revenue growth aided by contributions from wireless services. Wireless data services, which represent $22 billion in annualized revenues and are growing at a rate of approximately 18% per annum is a key driver.  AT&T’s wireless business, in particular the post-paid segment, is benefiting from promotional strategies that it had undertaken.

AT&T, which operates with other carriers like Verizon Communications Inc. (VZ - Analyst Report), Sprint Corporation (S - Analyst Report) and T-Mobile US, Inc. (TMUS - Snapshot Report), has a Zacks Rank #3 (Hold).

Please login to or register to post a comment.

New to Zacks?

Start Here

Zacks Investment Research


Are you a new Zacks Member or a visitor to

Top Zacks Features

My Portfolio Tracker

Is it Time to Sell?

One of the most important steps you can take today is to set up your portfolio tracker on Once you do, you'll be notified of major events affecting your stocks and/or funds with daily email alerts.

More Zacks Resources

Zacks Rank Home - Evaluate your stocks and use the Zacks Rank to eliminate the losers and keep the winners.

Mutual Fund Rank Home - Evaluate your funds with the Mutual Fund Rank for both your personal and retirement funds.

Stock/Mutual Fund Screening - Find better stocks and mutual funds. The ones most likely to beat the market and provide a positive return.

My Portfolio - Track your Portfolio and find out where your stocks/mutual funds stack up with the Zacks Rank.

Zacks #1 Rank Top Movers for Zacks #1 Rank Top Movers

Company Symbol Price %Chg
CENTURY ALU… CENX 27.23 +8.99%
SUPER MICRO… SMCI 26.61 +8.66%
BANCO DO BR… BDORY 16.65 +7.21%
CANADIAN SO… CSIQ 37.75 +6.52%
WILLDAN GRO… WLDN 11.37 +5.77%