NEW YORK (TheStreet) -- Leading telecom service provider AT&T (T) is one of my top dividend stocks for 2015. The stock has lost 5% in 2014, closing Thursday at $33.51, but offers an attractive 5.5% dividend yield.
Ma Bell yields over 80 basis points higher than its closest competitor, Verizon (VZ) , and a full 330 basis points more than the benchmark 10-year U.S. Treasury note. AT&T has increased its quarterly dividend for 30 consecutive years and I believe another increase is due any day now.
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The company currently offers a quarterly dividend of 46 cents a share, which can be covered 1.4 times with expected 2015 earnings of $2.58 a share. While I generally like to see two times annual earnings coverage to deem a dividend secure, utilities have historically been able to sustain a higher payout ratio.
As Verizon noted earlier this month, price competition is heating up in the wireless business, but this division should continue to be the primary driver for AT&T's earnings growth. In the meantime, the company has a solid balance sheet and its bonds receive an A-rating from the major agencies.
As AT&T continues to generate slow, but steady growth, I believe the stock can move up toward $36 in the new year, in addition to the receiving nearly $2 of dividend income.