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.
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