For many AT&T investors (NYSE:T)the dividend yield is the main reason they hold the stock.
Even if they like the yield, long-term shareholders would probably prefer to forget about AT&T’s stock price performance. It is trading down more than 40% from where it was a decade ago.
But there is still some hope since, more recently, AT&T stock has shown signs of life. Shares have rebounded from their 2023 lows on clear signs that management is committed to avoiding distractions and will focus on the telecommunications sector. This has allowed the company to post steady growth in monthly phone subscribers, and the stock is now up more than 30% from last year’s low.
AT&T dividend
AT&T currently offers a dividend yield by 6.2%, paying shareholders $0.2775 per share each quarter. In 2023, the company paid $8.1 billion in dividends, but that number will change this year.
The telecom giant has been steadily repurchasing shares, with its diluted average outstanding increasing from 7.47 million to 7.19 million in the first quarter, and shares outstanding are expected to fall further this year as the company continues to repurchase shares. At the current level of shares outstanding and dividend payments, the company would spend $7.98 billion on dividends this year.
Additionally, it’s possible that AT&T could increase its dividend this year.
Will AT&T increase its dividend in 2024?
AT&T has a long history of increasing its dividend every year, but that ended in 2022 when the company spun off the WarnerMedia business and cut its dividend by almost half.
Since then, the company has paid nine consecutive quarterly dividends per share of $0.2775 and has shown no indication that it will increase its dividend.
However, the telecom titan has returned to free cash flow growth, which could help convince management to increase its payouts. AT&T is expected to return to dividend growth eventually, and the stock price should jump when it announces a dividend increase.
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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the securities mentioned. The Motley Fool has a disclosure policy.
What is the dividend payout for AT&T stock? was originally published by The Motley Fool
