Investors who are looking for dividend stocks to create income streams during their retirement are working on a sound strategy for the future after the working phase of life is over. This can become an extreme advantage if you make the right investments. Experts and analysts in the financial sector view AT&T as a stock that can help you to reach retirement goals and help to create a more stable income for the future. Here are the facts that you need to know about why AT&T is an excellent dividend stock for retirees.
What makes AT&T stock a good bet?
AT&T is among the largest telecommunications companies in the world. They also have an excellent track record for financial stability. Their revenues are remarkably high, and in 2018 along, the gross income was $170.8 billion resulting in a net profit of $22.4 billion. This sets them in the prime position for being a good choice for investment in dividend stocks. Although the stock in this company is not one that growth investors take interest in, it is one that is worth looking at for dividend investment. The reason for this is because when you look t the current price of the stock, there is a dividend yield that is at 6.45 percent. AT&T does have debt that they’re paying down due to acquisitions, but their cash flow is remarkably high and they are on track and on firm financial footing. They have a proven track record for also making dividend payments annually and the current trajectory that they’re on is sustainable from a business perspective. For several years, the quarterly dividend has been increased by a penny per share.
Analysts believe that an investment of $500,000 in AT&T Stock at $32 a share (It may be more or less depending on the market at the time of investment), could easily result in a dividend income of around $32,000 per year, unless you decide to reinvest dividends, in which case, the earning potential would increase dramatically over time. Within ten years using a dividend reinvestment strategy, your investment of $500,000 could feasibly top $900,000 and the growth would continue to increase with each passing year.
According to Kiplinger, the market value of AT&T stock is $234.5 billion and it’s highlighted on their “Simply Safe Dividends’ best high dividend stocks list.” Their ongoing strategies include enhancement of customer relationships to reduce the churn and bundle unique assets together. So far, they’ve been successful in managing their advertisement and products packages along with programs to satisfy the demands of loyal customers and entice new ones to join.
Steadily increasing revenues
It’s not difficult to correlate the numbers for AT&T’s revenue increases. Their 2018 revenue stream of more than $170 billion was just $160 billion the year prior in 2017. This indicates a pattern of revenue growth. A ten billion dollar increase in revenue is an indication that they’re experiencing a period of healthy growth, even though some of it has been accomplished through acquisitions.
The financial stability factor
AT&T is a giant in their sector and they’re not a company that is likely to be going anywhere soon. Their networks reach throughout the globe and they are one of the most firmly entrenched and stable companies within the telecommunications industry in existence today. As long as there is a need for individuals and businesses to communicate with one another via phones, computers and other devices that require such vast networks, their products and services will remain relevant and highly in demand. It is firmly believed that AT&T is a dividend stock that has the likelihood and probability of providing retirees with a stable and reliable income stream. Even with the ups and downs in the market they’ve remained incredibly solid with periods of sideways trading but They’ve been steady in making their dividend payments.
A little known secret
AT&T is one of those rare companies who has reached a major milestone and achieved a type of elite status with regard to its positioning in the stock market. Companies who have experienced a minimum of 25 consecutive years in their yearly dividend increases are given the title of Dividend Aristocrat. AT&T has exceeded this benchmark and has hit the mark for the last 34 years. This is just one more reason why they’re a good bet for investors looking to create a healthy dividend stock portfolio for the retirement years. Just this simple fact along is not reason enough to choose a stock for investment, but it does give you an idea of their track history and it also serves as an indication of what can be expected in the near future, barring any extreme upsets within the industry. So far, there are none on the horizon in the foreseeable future.
While investment in any stock bears a degree of risk, AT&T stock appears to be among the safer bests with few risk factor indicators. The telecommunications industry is strong and the company is on solid financial footing. AT&T has a long and strong track record for making wise business decisions and enhancing their growth rate along with annual revenue increases, suitable debt repayment history and an impressive track increase in annual dividend payments which has been ongoing for the past 34 years. Experts in the field believe that it is possible to create solid revenue streams for the retirement years by following a plan of initial investment in AT&T stock, and reinvesting annual dividends to increase the number of stock shares owned. These are the reasons why AT&T dividend stock offers an excellent resource for investors who want start building their stock portfolio with reliable dividend stocks that have the highest likelihood of paying out well during their golden years.