Big Dividend Plays With Long-Term Gains

T data by YCharts

AT&T (T)

Background: AT&T Inc. is a premier communications holding company. Its subsidiaries and affiliates, AT&T operating companies, are the providers of AT&T services in the U.S. and around the world. AT&T trades an average of 24 million shares per day with a market cap of $198 billion.

52-Week Range: $27.41 to $38.58

Book Value: $17.69

Earnings Payout Percentage: 73%

After three solid weeks of discounting in share price, Ma Bell remains in a bull trend, albeit one that is now on sale. After falling 6.3%, and testing the 200-day moving average, the forward price-to-earnings multiple is near a very conservative 13.

The payout percentage is elevated and a concern for ongoing dividends, but next year's earnings are expected at $2.57 per share, lowering the payout ratio to less than 68%.

I consider 68% a very high number, and as a result, I don't feel the need to pound on the table and declare this the ultimate buy. I also anticipate the massive $1.76 in annual dividends isn't likely to increase soon, but hey, it's yielding 5.1%, so it doesn't have to increase soon. It's already "increased".

AT&T gained 18% in the last year, and while Ma Bell may not be my favorite in this group, it certainly earned its place here.

Forget about finding any short-sellers. Short interest is so low I only include it to demonstrate the smart money is not betting against this company. Just 0.8% of the float is short based on the last reported numbers. T Payout Ratio TTM data by YCharts

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