NEW YORK ( TheStreet) -- I don't consider myself old, but I often find myself talking about the past in the same way that "boring older people" did when I was younger.Take AT&T ( T), for example. I remember when "Ma Bell" was the only game in town. There were no cellphones. You had to pay more if you wanted touch-tone buttons instead of a rotary dial. Long distance wasn't included as part of any plan, and it was expensive. But did you know AT&T company was recently awarded the top spot in J.D. Power customer satisfaction for 2013? For those who don't remember, try to imagine a customer service mix between the local Department of Motor Vehicles and Charter Communications ( CHTR). After 30 years of adjusting to the realities of a competitive free market, Ma Bell reached the top of customer service. Investors and customers should anticipate the C-suite continuing to focus on the customer experience. T Free Cash Flow TTM data by YCharts
In the last 12 years, AT&T transitioned from a landline telco offering cellphone service into a cellphone provider offering U-verse. U-verse is a blended service of high-speed Internet and TV. Although I am unable to subscribe to U-verse at my home (I can get DSL.), most locations that are able to subscribe to U-verse are also able to select a similar competing offering from another such as Charter, Comcast ( CMCSA), Time Warner Cable ( TWC) and Verizon Communications ( VZ). Regardless of the competitive landscape, AT&T is executing well. Wireless revenue increased 5.7% last quarter compared to the same period last year. Wireless data revenue increased nearly 20%, and the previously mentioned U-Verse service reached a new mile-stone of 5 million active subscribers. AT&T's valuation is a little rich when examined through the rearview mirror, but if we look at estimated earnings, this wireless carrier becomes downright cheap. The forward price-to-earnings ratio is only 13.3, and the amount of debt in relation to cash flow, earnings, and cash on hand also makes AT&T attractive. Verizon and Sprint ( S), the other two of the three biggest carriers, failed to encroach on AT&T's market share nearly as much as some predicted when Apple ( AAPL) discontinued the exclusive deal with AT&T and started offering iPhones to others.
The weekly chart is quite optimistic. The fast moving averages are trending higher above the 200-period moving average, and we are within a bull trend. After adding strong fundamentals and upbeat technicals we can place the cherry on top. AT&T pays a 5% dividend yield and has a falling payout ratio as you can see in the chart above. What that means is this high-yield stock will pay you to buy it, and the dividend appears as solid as just about any other company I have looked at in months. Investors should count on dividend increases in the future based on their current performance. The only question remaining is when to enter. Since the daily chart is trending near the 200-day moving average, I suggest entering near $35.40 or lower as a reasonably discounted entry point. At the time of publication, Weinstein had no positions in stocks mentioned. Follow @RobertWeinstein This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.