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3 Buy-Rated Dividend Stocks: NLY, MPW, T

AT&T

Dividend Yield: 4.80%

AT&T (NYSE: T) shares currently have a dividend yield of 4.80%.

AT&T Inc. provides telecommunications services to consumers, businesses, and other providers in the United States and internationally. The company operates in three segments: Wireless, Wireline, and Other. The company has a P/E ratio of 28.20.

The average volume for AT&T has been 25,526,900 shares per day over the past 30 days. AT&T has a market cap of $200.3 billion and is part of the telecommunications industry. Shares are up 11.3% year to date as of the close of trading on Wednesday.

TheStreet Ratings rates AT&T as a buy. The company's strengths can be seen in multiple areas, such as its increase in stock price during the past year, growth in earnings per share, expanding profit margins, good cash flow from operations and largely solid financial position with reasonable debt levels by most measures. Although no company is perfect, currently we do not see any significant weaknesses which are likely to detract from the generally positive outlook.

Highlights from the ratings report include:

  • The stock has risen over the past year as investors have generally rewarded the company for its earnings growth and other positive factors like the ones we have cited in this report. Looking ahead, unless broad bear market conditions prevail, we still see more upside potential for this stock, despite the fact that it has already risen over the past year.
  • AT&T INC has improved earnings per share by 11.7% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past year. We feel that this trend should continue. During the past fiscal year, AT&T INC increased its bottom line by earning $1.21 versus $0.66 in the prior year. This year, the market expects an improvement in earnings ($2.51 versus $1.21).
  • The gross profit margin for AT&T INC is rather high; currently it is at 60.00%. It has increased from the same quarter the previous year. Along with this, the net profit margin of 11.79% is above that of the industry average.
  • Net operating cash flow has slightly increased to $8,199.00 million or 5.16% when compared to the same quarter last year. Despite an increase in cash flow, AT&T INC's cash flow growth rate is still lower than the industry average growth rate of 19.91%.
  • The debt-to-equity ratio is somewhat low, currently at 0.84, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that T's debt-to-equity ratio is low, the quick ratio, which is currently 0.54, displays a potential problem in covering short-term cash needs.

New From TheStreet: Jim Cramer's Protégé, Dave Peltier, only buys dividend stocks that have the potential for a 3% to 4% yield and 10% growth. Get his best picks for less than $50/year.

Other helpful dividend tools from TheStreet:

Editor's Note: TheStreet ratings do not represent the views of TheStreet's staff or its contributors. Ratings are established by computer based on metrics for performance (which includes growth, stock performance, efficiency and valuation) and risk (volatility and solvency). Companies with poor cash flow or high debt levels tend to earn lower ratings in our model.

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