Dividend Investing: AT&T

I have my IRA now with Vanguard and will be putting that money into index funds and onto auto pilot. But I still like to ‘play’ in the market a bit on my own, so I put a little money each month in to my Buy and Hold account. In this account I only purchase dividend stocks with the goal of generating a nice income bearing account. Hopefully in 20 years it will produce a decent monthly income to cover something like food or my comic book habit (need something to do in retirement). I’m being realistic that I don’t think it will cover all living expenses, but who knows.

I may be weird or even wrong to do so but along with all the usual stuff to look for (price, growth, yield) one of the things I look for in the stock is the payment day of the dividends, or more so the month. Dosen’t really help if they all pay in the same month, then I would only see income quarterly. I also practice the thought of invest in what you know. I don’t go looking for the next big thing, but rather well know and established companies.

ATT

ATT as most know is a wireless provider, in fact number 2 among the US wireless carriers. I have been using ATT as my wireless phone service since 2001 (back in the cingular days) so they are a company I know and use daily.

Now if you are a trader or looking for a growth stock this may not be the one. It has been hovering in a tight 52 week zone of only a couple dollars, currently right in the middle. With the recent troubles with their attempt to purchase T-Mobile they may even be looking bleaker to some, with some saying the buyout is the only way for them to really grow. If the buy out dosen’t go through it will still cost them $4 billion and that may scare some investors away. I say good! With a cheaper price I can pick up even more shares. You see what I am looking at is the rare 6% yield on the dividends.

Att is a sound company that has been around a long, long time and I feel will be around for quite awhile longer (hoping at least 30 years). ATT has paid a dividend as far back as I can see and best part is it has increased every single year. Even through this slow economy it has still increased (ok only a penny but thats still an increase) in good times it was a good increase as well. The stock is one that when it has gotten to high it has performed a stock split as well. Haven’t had one in quite awhile but I’m sure once the economy gets roaring back it can happen again.

With things the way they are now its a good time to start on this one and dollar cost average from now till retirement.Recently heard a statement attributed to Warren Buffet about his love for Coca Cola (the stock not the soft drink, and another I am considering) which he has been buying regularly just for the dividend. He said about 2015 or so he will being earning dividends form coke in the amounts greater than what he has paid for the stock! Now I can’t buy in the volumes that he can but this is my goal. To dollar cost average into divided paying stocks like ATT here so that when I retire they will be paying me a hefty monthly income.

I don’t own ATT at this time but it is one I think I will be acquiring next for the following reasons.

• Sound and long established company
• High dividend yield
• Dividends increase each year
• Currently very affordably for me
• Pays dividends on a month that I currently have no payouts.

Little disclaimer if you can t tell I am not a professional broker and my reasons are my opinions. If you are considering investing please do your own homework and make your own decisions.

SO what do your think of ATT as an investment? DO you invest in dividend  stocks?