For Immediate Release
Chicago, IL – December 20, 2011 – Zacks.com announces the list of stocks featured in the Analyst Blog. Every day the Zacks Equity Research analysts discuss the latest news and events impacting stocks and the financial markets. Stocks recently featured in the blog include AT&T Inc. (T - Analyst Report) , Verizon Communications Inc. (VZ - Analyst Report) , CenturyLink Inc. (CTL - Analyst Report) , Windstream Corporation (WIN - Analyst Report) and Frontier Communications (FTR - Analyst Report) .
Get the most recent insight from Zacks Equity Research with the free Profit from the Pros newsletter: https://at.zacks.com/?id=5513
Here are highlights from Monday’s Analyst Blog:
AT&T Hikes Dividend, Risks Remain
Investing in telecom stocks seems risky as the global market faces the threat of yet another recession. While we await a political resolution to the Euro-zone sovereign debt crisis, the contagion is spreading globally, weighing on economic growth. The problems in Europe are swelling and spilling over to the rest of the world and might even stall the slowly moving U.S. economy.
In the ongoing turmoil, dividend-paying stocks appear safe investments. These stocks must necessarily have strong financials and the companies should have the ability to invest further for new developments. In this regard, we believe this is the right time to buy telecom stocks paying higher dividends as these companies would emerge stronger when the economy recovers.
Let us move to AT&T Inc.’s (T - Analyst Report) investment consideration and dividend analysis, which is currently the hot pick in the entire telecom sector.
The second-largest U.S. mobile service provider hiked its annual dividend by 2.3% to $1.76 per share, reflecting its strong commitment to deliver increased returns to its shareholders. AT&T will now pay a quarterly dividend of 44 cents compared with 43 cents paid this year. This marks the 28th consecutive year of dividend hike. Last year, AT&T increased its annual dividend twice, bringing it to $1.72 per share.
The new dividend will be paid on February 1, 2012 to shareholders of record as of January 10, 2012. The new annual payout of $1.76 represents a dividend yield of 6.1%. This is higher than its key rival and the largest U.S. mobile service provider Verizon Communications Inc. (VZ - Analyst Report) , which raised its annual dividend by 2.6% to $2 per share in September, reflecting a dividend yield of 5.20%.
AT&T distributed $7.6 billion and $9.9 billion as dividends to its shareholders in the first nine month of this year and fiscal 2010, respectively. By comparison, Verizon paid dividends of a respective $4.1 billion and $5.4 billion in the first nine months of this year and fiscal 2010.
Other telecom service providers such as CenturyLink Inc. (CTL - Analyst Report) , Windstream Corporation (WIN - Analyst Report) and Frontier Communications (FTR - Analyst Report) currently offer high dividend yields of 8.2% 8.6% and 15.20%, respectively.
The dividend hike reveals AT&T’s solid financial position, with a healthy balance sheet and growing free cash flows. Strong yields and continued profit generation notwithstanding, we believe AT&T is an unsafe stock to invest in as the company is battling its ambitious $39 billion takeover of T-Mobile, announced in March. AT&T plans to take a $4 billion charge in the fourth quarter against the takeover, which has heightened risks of failure.
We are maintaining our long-term Neutral recommendation on AT&T. For the short term (1-3 months), the stock retains a Zacks #3 (Hold) Rank.
Want more from Zacks Equity Research? Subscribe to the free Profit from the Pros newsletter: https://at.zacks.com/?id=5515.
About Zacks Equity Research
Zacks Equity Research provides the best of quantitative and qualitative analysis to help investors know what stocks to buy and which to sell for the long-term.
Continuous coverage is provided for a universe of 1,150 publicly traded stocks. Our analysts are organized by industry which gives them keen insights to developments that affect company profits and stock performance. Recommendations and target prices are six-month time horizons.
Zacks "Profit from the Pros" e-mail newsletter provides highlights of the latest analysis from Zacks Equity Research. Subscribe to this free newsletter today: https://at.zacks.com/?id=5517
Zacks.com is a property of Zacks Investment Research, Inc., which was formed in 1978 by Leon Zacks. As a PhD from MIT Len knew he could find patterns in stock market data that would lead to superior investment results. Amongst his many accomplishments was the formation of his proprietary stock picking system; the Zacks Rank, which continues to outperform the market by nearly a 3 to 1 margin. The best way to unlock the profitable stock recommendations and market insights of Zacks Investment Research is through our free daily email newsletter; Profit from the Pros. In short, it's your steady flow of Profitable ideas GUARANTEED to be worth your time! Register for your free subscription to Profit from the Pros at https://at.zacks.com/?id=5518.
Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Follow us on Twitter: http://twitter.com/zacksresearch
Join us on Facebook: http://www.facebook.com/home.php#/pages/Zacks-Investment-Research/57553657748?ref=ts
Disclaimer: Past performance does not guarantee future results. Investors should always research companies and securities before making any investments. Nothing herein should be construed as an offer or solicitation to buy or sell any security.
Zacks Investment Research
800-767-3771 ext. 9339