Dow Dividend Checkup: AT&T

The following video is part of our "Motley Fool Conversations" series, in which analyst John Reeves discusses topics across the investing world.

Over the next several weeks we'll be looking at each of the components of the Dow Jones Industrial Average and subjecting each of them to a dividend checkup. Today, we're looking at AT&T. AT&T provides a wide variety of telecommunications services to consumers and businesses in the U.S. and abroad. It generates a lot of revenue, and also returns a lot of cash to investors; 2012 marked the 29th straight year AT&T increased its dividend. AT&T has the No. 1 yield among Dow stocks at 5%, which compares very favorably to the 3% average yield for the Dow as a whole. Competitor Verizon also provides a strong dividend yield at 4.7%. Is this one attractive? The company could possibly have some debt concerns in the future, and there seems to be slowing revenue growth. There could also be concern that Microsoft's Skype could disrupt a lot of its business. And the company's heavy reliance on Apple's iPhone is another risk factor to be aware of. All in all, investors should know what they're buying if they pick up shares for the high yield.

AT&T has a great dividend, but it may require a closer look by investors. If you'd like to learn about some additional high-yielding stocks, The Motley Fool has compiled a special free report outlining our top nine dependable, dividend-paying stocks. It's called "Secure Your Future With 9 Rock-Solid Dividend Stocks." You can access your copy today at no cost! Just click here to discover the winners we've picked.

John Reeves owns shares of Apple and Verizon. The Motley Fool owns shares of Apple and Microsoft. Motley Fool newsletter services recommend Apple and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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