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Wednesday, January 16, 2019

Recent buy: AT&T (T)

Earlier in January I purchased my first shares in 2019. I used around $1.200 to purchase 42 shares in AT&T (ticker symbol: T) for a price of $28.65. This will add around €75 to my annual forward dividend income.

My reasoning is as follows:
  • T seemed undervalued based on a PE-ratio, compared to earlier years.
  • T's yield at the time of my purchase was monstrous. There's no need for high growth with a yield of 7,1%. T's recent dividend growth is muted but coupled with a historically high yield this seems fine.
  • Major, recent acquisitions of T are TimeWarner for $85 billion (in 2016) and DirectTV for $48 billion (in 2015). Hopefully this will provide top line growth and a strengthening of AT&T's position in the content space.
  • Its current debt leven is worring, but muted dividend growth combined with some asset sales should provide enough wiggle room in order to reduce debt levels.
  • Finally, I had no exposure towards telecommunications in my dividend portfolio. The addition of T seems logical from that perspective.
What do you think of my purchase of T? Did you recently purchased shares of T?

5 comments:

  1. Great buy and long term hold candidate. Own shares myself. To lock in 7% on today’s at&t is too good to pass up. High debt but tons of revenue.

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    Replies
    1. Hi Steve-O, agreed! Nice to hear from a fellow shareholder :-)

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  2. I'm very tempted to pick up some more shares of T here. It's just too tempting.

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    Replies
    1. The stock gained some ground in the past three weeks, but it still looks nice.

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  3. I added T recently around $27/share. Anything below $30/share is excellent in my book. The yield is great and the company is aggressively paying down their debt. It'll take some time for the merged company to materialize, but I think we will really be happy that we added stock at these levels years from now.

    Bert

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