For many AT&T investors (NYSE:T)the dividend yield is the main reason they own the shares.
While they like the returns, long-term shareholders would probably rather forget about AT&T stock price performance. The price has fallen more than 40% compared to ten years ago.
But there’s still some hope, as AT&T stock has shown signs of life recently. Shares recovered from their 2023 lows on clear signs that management is committed to avoiding distractions and focusing on the telecom sector. This helped the company achieve steady growth in monthly phone subscribers, and the stock is now up more than 30% from last year’s low.
AT&T’s dividend
AT&T currently offers a dividend yield of 6.2% and pays shareholders $0.2775 per share every quarter. In 2023, the company paid $8.1 billion in dividends, but that number will change this year.
The telecom giant has been steadily buying back shares, with the average number of diluted shares outstanding falling from 7.47 million to 7.19 million in the first quarter. Shares outstanding are likely to fall again this year if the company continues to buy back shares. At current levels of shares outstanding and dividend payments, the company would issue $7.98 billion in dividends this year.
Additionally, there is a possibility that AT&T will increase its dividend this year.
Will AT&T increase its dividend in 2024?
AT&T had a long history of increasing its dividend annually, but that came to an end in 2022 when the company spun off the WarnerMedia business and cut the dividend nearly in half.
Since then, the company has paid nine consecutive quarterly dividends per share of $0.2775 and there is no indication that it would increase its dividend.
However, the telecom titan has returned to free cash flow growth, which could convince management to increase the payout. AT&T should eventually return to dividend growth, and its stock price will likely rise if it announces a dividend increase.
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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
What is the dividend payout for AT&T stock? was originally published by The Motley Fool
