Thinking Of Buying AT&T For Its 6.5% Dividend Yield? Consider This Alternative Option

Thinking Of Buying AT&T For Its 6.5% Dividend Yield? Consider This Alternative Option

Considering buying AT&T for its 6.5% dividend yield? Consider this alternative option

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For income-oriented investors, AT&T Inc. (NYSE:T) has long been a staple of dividend portfolios. With a forward dividend yield of 6.48% and a payout ratio of just 47.03%, the telecom giant appears to offer an attractive combination of high yield and sustainability. However, before rushing out to buy AT&T stock, it’s worth considering an alternative option that could potentially offer an even better near-term earnings play.

It is true that AT&T has a strong history of consistent dividend growth, having increased its dividend for 38 consecutive years until 2022, when it reduced its quarterly dividend from $0.52 to $0.2775 per year. action following the spin-off of its media assets. But things are looking up for the company, with improved performance suggesting dividend increases could resume in the near future.

AT&T’s first quarter 2024 earnings release highlighted strong 5G and fiber customer additions, profitable growth driven by increased mobility and broadband revenues, and a significant increase in ‘year-over-year free cash flow. The company also reaffirmed its full-year financial guidance, projecting wireless revenue growth of 3%, broadband revenue growth of more than 7% and free cash flow of between 17 and 18 billion dollars.

Analysts seem to agree that AT&T is on the right track. The latest three analyst notes, issued by Barclays, Scotiabank and RBC Capital between April 11 and 29, 2024, have an average price target of $19.83, implying an upside of 15.51% per compared to current levels.

So, with a juicy 6.5% yield, improving fundamentals, and bullish analyst sentiment, AT&T appears to be a tempting buy for dividend investors. However, there is one key factor to consider before pulling the trigger: the looming specter of a potential recession in the United States.

Many economists and market watchers believe the U.S. economy is close to a slowdown, which could negatively impact stock prices across the board – even for relatively defensive names like AT&T. If a recession materializes, there may be a better opportunity to acquire AT&T stock at an even more attractive valuation in the future.

A high-yield alternative opportunity

In the meantime, income investors might consider an alternative option: Base Camp Alpine Notes. This short-term cash management tool, offered by real estate investment platform EquityMultiple, targets an attractive return of 9% with a short duration of 3 months and a low minimum investment of just $1,000.

The beauty of Basecamp Alpine Notes is that they allow investors to earn a high return on their cash while retaining the flexibility to redeploy that capital when better opportunities present themselves, such as a potential decline in the company’s stock price. AT&T caused by a recession. Rather than locking up funds in AT&T stock today, investors could put their money in Basecamp Alpine Notes, earn a 9% annualized return, then have dry powder ready to fire when the time comes.

Basecamp Alpine Notes also offers a level of simplicity and predictability that can be appealing during times of economic uncertainty. With zero fees and monthly capitalization, investors know exactly what return they can expect over a 3-month period. And with a strong track record of meeting all payment obligations, EquityMultiple has built a reputation as a reliable partner for income-seeking investors. Visit the EquityMultiple website to learn more about Basecamp Alpine Notes.

Of course, no investment is without risk, and Basecamp Alpine Notes is no exception. As with any investment, it is essential to do your due diligence and carefully consider how the notes fit into your overall financial plan.

But for investors eyeing AT&T’s 6.5% dividend yield and wondering if it’s a good time to buy, Base Camp Alpine Notes offer an attractive alternative – a way to generate high income in the short term while keeping your options open for future opportunities. In a market full of uncertainty, this type of flexibility can prove invaluable.

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