Dividend Aristocrats In Focus Part 2: AT&T Inc. (T)

AT&T Inc. (NYSE:T) is the only Dividend Aristocrat in the telecom sector.

What does it take to be a Dividend Aristocrat?

– Be in the S&P 500

– Meet minimum size/liquidity requirements

– 25+ Years of consecutive dividend increases

Growing dividend payments every year for 25+ consecutive years takes a strong and durable competitive advantage.  That’s likely why the Dividend Aristocrats Index has performed so well.

– 10.3% CAGR over last decade for Dividend Aristocrats Index

– 7.2% CAGR over last decade for S&P 500

There are currently only 50 Dividend Aristocrat stocks. You can see all of the Dividend Aristocrats here.

AT&T stands out even among the Dividend Aristocrats. It is the only telecom Dividend Aristocrat. It also has an unusually high dividend yield of 4.9%.

The company has paid increasing dividends for 32 consecutive years. The company is widely expected to announce another increase in mid-December of 2016. You can see AT&T’s quarterly dividend history since 1984 below.

One of the common misconceptions about dividend stocks is that they provide below average returns in exchange for current income. AT&T has slightly outperformed the market over the last decade (including dividends). The image below shows this performance.

We know AT&T is a high quality business with a strong competitive advantage that has rewarded investors with competitive returns and high dividends over the last decade. This article takes an in depth look into the investment prospects of AT&T.