Entering text into the input field will update the search result below

AT&T: This Dividend Aristocrat Offers 13-14% Total Returns Over The Next 10 Years

Feb. 04, 2019 1:47 PM ETAT&T Inc. (T)193 Comments
Kody's Dividends profile picture
Kody's Dividends


  • AT&T offers investors a 6.9% dividend yield at current prices, along with a history of delivering dividend increases since 1985.
  • Despite risks, AT&T is well-positioned to continue its dividend growth streak for years to come, with accelerated dividend growth once deleveraging is complete.
  • AT&T is currently undervalued by 18.6% using the average of my valuation methods.
  • AT&T offers patient, long-term income investors total returns of 13-14% over the next 10 years.

As I've come to find since I began investing in September 2017, Wall Street and many retail investors have a short-term view. This presents opportunities for dividend growth investors with a long time horizon. As we've seen numerous times lately, companies have been getting clobbered this year despite reporting otherwise solid results on guidance that is lower than expected.

Image Source: imgflip

One such example of a company that recently reported earnings and subsequently got clobbered was AT&T (NYSE:T).

I'll cover in more detail the dividend and the prospects of the dividend going forward, the opportunities and risks to consider, what I believe to be fair value for AT&T going forward, how that compares to the current price, and wrapping up how all this translates into the potential for market-beating returns over the next 10 years.

Reason #1: AT&T's Dividend Aristocrat Status And Safe Dividend

Image Source: Simply Safe Dividends

While AT&T garners a lot of criticism from the Seeking Alpha community, with many complaining of the weak dividend increases the past few years, nobody can deny that AT&T has a rich history of providing safe, growing dividends.

There's a reason that AT&T was known as the prototypical "widow and orphan" stock. The company operates in an industry that is an oligopoly with fellow competitors Verizon (VZ), T-Mobile (TMUS) and Sprint (S) (with T-Mobile and Sprint aiming to complete a merger). This type of market structure has allowed AT&T to deliver tons of cash to shareholders throughout the years. Though AT&T won't make investors rich overnight like a tech startup, I view it as one of the more sure investments available.

In fact, the company has increased its dividend every year since 1985. While AT&T's 10-year dividend growth rate of 2.6% struggles to keep pace with inflation, I believe that the

This article was written by

Kody's Dividends profile picture
Hi, my name is Kody. I run Kody's Dividends. As you might guess, this is a blog primarily documenting my journey towards financial independence using dividend growth investing as the means to transform the dream of financial independence into a reality.I am forever indebted to this community because it helped me transition from simply being an investor to being an analyst for The Motley Fool back in June 2021 under my real name of Kody Kester. As a display of my gratitude, I will still be writing one article a month for SA starting in July 2022.

Analyst’s Disclosure: I am/we are long T. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.