Monday, November 13, 2017

Latest Buy - AT&T

I added a few more shares of T to my existing position of over 100 shares. This should not come as a surprise, because most dividend growth investors have been thinking about AT&T for the last couple of weeks. A lot of factors, including the recent merger issues between T-Mobile and Sprint, and the very interesting DOJ investigation in the AT&T-TWC merger have pulled this stock down.

T has fallen almost 20% since the start of this year, while the broader S&P 500 index is up about 16%. Does it make sense, i don't know. Is AT&T suddenly less valuable than it was at the start of the year, i am sure it is not.

The share price was about $40 a piece as recently as April of this year. There are a lot of articles both for and against the case of T, some even say the dividend payout is not sustainable. 'Experts' are weighing in on how the merger with TWC is a great thing and if it doesn't happen it is all doom and gloom, while other experts argue the case that not going through with the merger is going to be A-ok.

I am trying to ignore the noise on this one, and last week went ahead and added more shares to my existing position in AT&T. I purchased 15 shares at $33.31 each. At $1.96 a year, the yield on cost is about 5.88% and adds $29.40 to the yearly dividend income total. If they keep the existing plan of raising dividend by 0.04 a year, this purchase should yield a juicy 6% in 2018. Not too shabby. This also brings down my average cost basis.

That said - i am a bit weary. After this purchase, AT&T is the second largest position in dollar terms in my portfolio. It also is the largest dividend producer. Any change in the dividend policy affects my passive income, and big moves downward in the stock price will affect the portfolio value overall.

What have you been buying while the market continues to be at all time highs ?

2 comments:

  1. good to see you back man,yeah i added ATT too in small batches over last few weeks.

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    1. @desidividend - thanks buddy, i have been around - just haven't been posting as much:).
      There are much worse options in the market than adding to T right now ...

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