To appease a growing wireless data appetite from phones, phablets, and tablets, AT&T raised $4.85 billion from Crown Castle international ( CCI). Crown Castle is buying 600 cell phone towers and will receive an exclusive right to lease and operate over 9,000 other towers from AT&T.

The deal between Crown Castle and AT&T makes sense because Crown Castle can increase the monetization of each tower while at the same time lowering AT&T's cost. Also, AT&T is able to free up a war chest of cash that it can use for buying light spectrum and acquisitions including Europe.

The cash also allows AT&T to continue upgrading its wireless technology, and for shareholders it means cash for stock buybacks. I don't usually get overly impressed when a company announces the board "approved" a buyback. First of all, they almost always word as "up to X dollars" and rarely reach the limit.

Secondly, buybacks are management's way of acknowledging they are overpaid and don't have a legitimate better use of capital. Either way, buybacks rarely make sense. But sometimes they do, and for AT&T I believe a smaller float is healthy for the company.

AT&T buying shares makes a lot of sense considering its whopping and ever-increasing dividend payments, currently paying about 5.2%. Although the expected forward payout rate is over 50%, its stability of income allows for a greater margin of error.

For an extra layer of safety, a yield-seeking investor can buy AT&T for about $35.23 and in turn sell a January $36 strike price call option for about 60 cents. The option expires in 86 days and raises the yield by almost 2% while allowing dividend collection in the meantime. Selling the option also lowers your risk by more than 1%.

I like this strategy because the focus is on managing risk, and the option expires after the next expected dividend payment in January.

At the time of publication the author had no position in any of the stocks mentioned.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.
Robert Weinstein is an active trader focusing on the psychological importance of risk mitigation, emotion and financial behavior of market participants. Robert co-founded the investing blog StockSaints, where he writes a journal about his trading activity and experiences.

In addition to TheStreet, Robert also contributes to Real Money Pro, providing real-time trading ideas for stocks, options and futures.

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