This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

5 Dow Dividend Stocks to Beat the S&P


Content on this page requires a newer version of Adobe Flash Player.

Get Adobe Flash player

2013 is turning out to be a pretty tepid year for AT&T ( T). The $50 billion communications stock is effectively flat year-to-date, ignoring the ups and downs along the way. But investors' returns haven't exactly been zero. AT&T's massive dividend payout currently works out to a 5.06% annual yield. That dividend gives it top billing on our list today.

>>5 Rocket Stocks to Buy for Earnings Season

AT&T is the incumbent telephone company in many parts of the country, but the firm is better known for its AT&T mobility business, which boasts more than 92 million cellular subscribers. That customer Rolodex makes AT&T the second-largest wireless carrier in the U.S. AT&T created a coup when it began offering the iPhone in 2007, enjoying nearly four years of exclusivity with the extremely popular device. Today, approximately 40% of AT&T's customers are iPhone users, a heavy skew towards the higher revenues per user that smartphone customers bring in. As AT&T continues to convert its existing cellular users to smartphones, margins and sales should still have room to expand.

While AT&T's cellular business may have more visibility, investors shouldn't forget about the firm's legacy fixed line business. Those landlines provide significant cash flows, and the infrastructure offers a reasonably deep economic moat. Bundled packages provide a growth platform for AT&T's fixed lines, even if they're less exciting than mobile. With a payout ratio of just 50%, AT&T has another $10 billion in free cash flows that it can potentially use to reward investors.

Even though AT&T trades for a relatively hefty earnings multiple, its dividend payout more than makes up for the appearance of a high price tag on shares.
2 of 6

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free

Check Out Our Best Services for Investors

Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
DD $59.08 1.60%
INTC $28.81 -0.03%
MRK $49.16 0.68%
T $36.65 -1.24%
VZ $50.15 -1.16%


Chart of I:DJI
DOW 16,014.38 -12.67 -0.08%
S&P 500 1,852.21 -1.23 -0.07%
NASDAQ 4,268.7630 -14.99 -0.35%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs