This Stock Has Jumped 23% and Has a 4% Yield

AT&T Inc. (NYSE: T) was founded in 1885 and was the dominant telephone company until 1984. That’s when the federal government, which claimed the telecom was a monopoly, broke it up. After some of the smaller companies created by the breakup merged, one of them took on the AT&T name again in 2005.

AT&T has paid a dividend for 39 years, which was when the smaller companies started to operate. Its current yield is 4%, and the stock is up 23% this year, while the S&P 500 is only 9% higher.

AT&T today is mostly a cellular phone company. It ranks third in that category with 118 million wireless customers. Verizon has 133 million and T-Mobile 146 million.

In the most recent quarter, AT&T’s revenue rose 3.5% to $30.8 billion. Net income hit $4.9 billion, up from $3.9 billion in the same quarter the year before.

The dominance of wireless shows up in AT&T’s earnings. What it calls “mobility” revenue was $21.8 billion, compared with $20.4 billion the year before.

What AT&T calls “business wireline,” which is a legacy part of the company’s revenue, showed a decline of 9.3% to $4.3 billion. “Consumer wireline,” which delivers broadband to the home, had revenue of $3.5 billion, up 5.8%.

In its 2025 forecast, AT&T said “mobility” revenue would rise only 3%. The total number of wireless customers in the United States is growing slowly, which caps the increase of revenue from Verizon and T-Mobile as well.

An investment in AT&T is not a growth play. It is a play on steady revenue and a solid dividend. Regardless of economic conditions, people are likely to keep wireless service.

All of the eight most recent analyst calls on the stock have rated it as either Buy or Overweight, suggesting that Wall Street thinks the stock is still cheap.

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