Important Updates for Investors
Carla Pasternak's Premiere Issue of High-Yield International Just
Released
Income expert Carla Pasternak's debut issue of High-Yield
International covers a Taiwanese manufacturer yielding 9.5%... a
rare Mexican monopoly yielding 13.4%... and other top-performing
investments yielding up to 19.0%.
Government's Biofuel Timetable Could Spell +15,900% Growth
+15,900% growth might seem far-fetched... but it's not. In fact, it
is mandated by law. And I've identified the ONLY stock positioned to
capture this growth.
The
Silver Lining to a Falling Dollar
Despite the U.S. national debt, there is a silver lining for income
investors. This massive spending, combined with movement out of U.S.
Treasuries, is going to take its toll on the dollar, and
international income investors could reap the rewards in the form of
higher dividends. |
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This Blue Chip Stock Has a Great Dividend Track Record |
Published:
December 15, 2008
AT&T (NYSE: T, $29.98) -- This leading U.S.
telecommunications company is the largest provider of local and
long distance services in the United States. It also operates
AT&T Mobility, the dominant American wireless company, with
approximately 75 million customers and nearly 30% market share.
This blue-chip company is a member of numerous stock indices,
including the Dow Jones Industrial Average and S&P 500.
T has a history of regular dividend increases. In 2006, it paid
$1.33 yearly. This amount was hiked to $1.42 in 2007 and rose to
$0.40 a quarter or an expected payout of $1.60 in 2008. The
stock now yields approximately 5.3% ($1.60/$29.98). (Given the
economic climate, it is likely the dividend will not rise in
2009.)
Many readers may remember AT&T as Ma Bell, the ultimate widows
and orphans stock. This incarnation of the company was divided
by court order in 1984 with T allowed to retain its long
distance, research & development, and manufacturing services. A
number of regional "baby Bells" were also created in that year.
Over time, the baby Bells consolidated. SBC merged with the
original AT&T in 2006 and retained the T symbol.
T now operates in 22 U.S. states. Most of its territory is in
the deep South, New England and the Midwest, although it also
has a strong presence in California and Nevada. T boasts 59
million local phone lines and 15 million high-speed Internet
customers. The company is also the parent of Yellow Pages.com.
Thus far, T has weathered the economic downturn relatively well.
In the third quarter of 2008, revenues were $31.3 billion, up
about +3% from the comparable quarter in 2007. T saw a +15.4%
growth in wireless revenue and added 2.4 iPhone 3G activations.
IPhone users spend on average 1.6 times more than average
subscribers. The company earned $0.55 per share versus $0.50 in
2007.
If the recession becomes severe enough, subscribers may of
course part with their cherished cell phones or be more cautious
in their use. However, the 27 analysts who cover the company see
2009 earnings per share rising marginally to $2.96 in 2009 from
the $2.85 they project for 2008.
The lowest 2009 estimate among the 27 analysts is $2.77. It is
worth noting that analysts' estimates have already come down
substantially as they have factored in the economic slowdown.
Roughly 90 days ago the 2009 consensus estimate was $3.31.
If T was to reach only the low end of this estimate, and keep
its dividend steady at $1.60 it would be paying out a highly
sustainable 57.8% of earnings ($1.60/$2.77). From this
perspective the dividend seems secure.
Like most stocks, T is down dramatically from its 52-week high
of $42.97. On a forward basis, the P/E is approximately 10
times, a reasonable multiple for a blue chip of this quality. In
an economic recovery, the stock could have capital gains
potential.
Action to Take --> T
offers a yield of over 5% and a chance for capital gains. Much
of the share price risk may already be factored in. The stock is
suitable for somewhat aggressive investors. To lock in a minimum
6% yield, the shares should be bought no higher than $26.67.
Good investing!
[http://www.streetauthority.com/includes/editor-profiles-hy.htm]
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