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Recent Buys

Recent Buy – AT&T (T)

AT&T Stock SymbolIt has been a while since I was able to announce I have made a buy where I am adding new capital into the portfolio. Free capital is tight and I have been working on a different goal of paying off debt and not taking on any more. But I was finally able to stash away a little bit and take advantage of this dip.

I purchased 18 shares of AT&T (T) at a cost basis of $33.09. You can find more info on T below.

 

T Stats
Annual Dividend: $1.96
Yield: 5.89%
Years Paying/ Increasing: 32 years
Dividend increase from prior year: 2%
Payout Ratio: 66.9%
P/E Ratio: 15.83
EPS: $2.07

 

There were a few reasons behind this buy. Mainly, it was a yield play which adds a lot of dividend income to my portfolio. Even though T has been increasing their dividend for over 30 years, the increments are small. Maybe 2 or 3 percent a year. I typically like higher growth dividend stocks for long term, but I think it is important to have a mix of both. Some high yield and some high growth. I don’t just chase yield around. But no one does high yield like T. Getting to almost 6% at the time of this post, it was hard to pass this opportunity up.

 

So the dividend income helps, but it isn’t the only reason for adding to my position. The price point was a factor as well. I have not seen T stock price this low since I originally bought it back in 2015. This buy helps me to lower my overall cost basis on this position. I have been waiting for an opportunity like this for a few years. There are a few others stocks I have my eye on right now to lower my cost basis as well, including CAH, GIS, HRL, etc. But I guess they will have to wait for another time.

 

As shown above, T has a dividend yield of 5.89% or $1.96 annually. This will add another $35.28 to my yearly dividend income. Broken down quarterly, it will add $8.82 per quarter. I am very happy with this purchase.

 

What do you think of this buy? Do you like T or do you currently own any? What other companies are on your watch list right now? Do you think the merger will go through? Comments are always welcome below.

 

41 Comments

  1. I like your buy and I think that the company is really undervalued at the moment. I hope it reached the bottom already and the only way is up now 🙂 I own 19 shares of T myself and I paid $32.53 for it a couple of years ago so it’s back to my starting point..
    -BI

    1. A new buy! Love it – ATT has been around for ages, although I haven’t personally bought it you’ve made me add it to “my potential buys” list.

      I just deposited the last funds into my IRA to max it out this year, so I will definitely be looking to buy soon :D.

      Thanks for sharing!

      1. That is a smart play. I think I still have about 1k left to add to my Roth this year. That is next on my list. I was originally going to put this money into that, but I couldn’t pass up this price since I have been waiting years to see it this low. I still have time for the IRA. Looking forward to seeing what you buy next. What is on your list?

    2. I agree. Haven’t seen the price this low in years. At least when it stays low, the DRIP of the dividends can buy even more at the low points. Making for more dividend income in time. Glad to see T paying you out as well.

  2. Good buy. I have been watching T also as a potential buy candidate. I already hold a position in the stock and have for a number of years like you Mr. Daze. It hit another 52 week low earlier this week, so it definitively is not like the majority of the stock market hitting new highs on a continual basis. The yield is so very enticing. Tom
    Tom @ Dividends Diversify recently posted…Please Pass the Salt (Part 2)My Profile

    1. Yeah T went down even more after I bought it. But seems like it is starting to climb its way back up now. There is a lot of value in the market right now. Love the yield on T as well. Would be a good company for the watch list for sure. Thanks for stopping by and commenting!

    1. I like the way you think. Stocking up at these levels is a great idea. VZ is also a nice company to own with pretty high yield. I don’t own any currently but wouldn’t mind looking into it in the future. Glad to see you taking advantage of this opportunity as well.

    1. Boring stocks are my favorite. Boring tends to be less volatile and good for long term. The high yield makes for a nice bonus though. T has been getting a lot of attention lately from the community on these dips.

    1. Nice to see you add to your position as well. Current levels make it a great buying opportunity. Adds a nice bit of dividend income. Should DRIP me one extra share per year. Thanks for your comment. Hope to see you around the site more often!

    1. Yeah I am excited to see what happens with the merger. Once that is straightened out, I see a big jump in price. Trying to take advantage of the uncertainty now. Seems like everyone is stocking on it right now.

  3. Great buy Daze! Keep some cash on the side though, in case T hits its 10 year low valuation. FastGraphs is showing $32.12 as the long-term bottom. I’ve stopped buying T, will wait for the price to turnaround before buying anymore. May not happen till we get some positive news on the merger.

    Take care.

    1. Always important to keep a little capital on the side to take advantage of opportunities like this. We are not too far from the bottom then. It hit around $32.50 the other day but it has jumped back up a dollar or so since then. You are allocated pretty heavily on T now. Makes sense to hold off until the price sees fit. Looking forward to seeing what happens with the merger. I think it would be a good long term play for both companies going forward. Let’s hope everything goes through smoothly. As always, thanks for your comments.

  4. I like the buy. AT&T is getting a lot of attention lately in the DGI community. That decline in price definitely create a nice little buying opportunity. I’m still thinking of averaging down as well.
    – SD

    1. Been waiting a few years to average down, so glad I was finally able to take advantage of it. There are a few other companies I have my eye on as well, but this opportunity sticks out above the rest at this moment. Hope you can find some capital to increase your position.

    1. Seems T has been getting a lot of attention among the DGI community. I wouldn’t doubt seeing a ton of other people taking advantage of this opportunity as well. Would probably be a smart move to add more at these levels.

  5. Daze –

    Great entry price on an aristocrat with a huge base of customers, serving products that most customers need – mobile device/data and internet. Picked some up myself last week, but you achieved a better price : ) Congrats!

    -Lanny

    1. Glad I was finally able to average down. I owned some already at a great price, around the $34 mark. But can’t pass up an opportunity to lower that even more. Who knows if we may ever see these prices again if the merger goes though. At this point, it is a waiting game. But doesn’t hurt to collect those big dividends while we wait right?

    1. Love getting a chance to buy stocks at a discount or lowering my cost basis. T is a great choice if you are looking for a next buy. Thanks for your comment. Glad you like the buy.

  6. Great buy, Dividend Daze! $35.28 is a nice amount of annual income to add to your portfolio! I’m a big fan of T and I’m hoping the price stays low for at least the next few months. I don’t currently own any position in it. As far as my watchlist right now: IBM, T, ENB, REI.UN, and a few other financial institutions. I look forward seeing the dividends reflected in your future dividend updates! Take care 🙂
    Reverse the Crush recently posted…A Window Towards Financial Independence – The Importance of VisionMy Profile

    1. Too bad I just missed the dividend for this month. But it will just make next year’s growth all that much better. The $35 in dividends from this buy will DRIP me another share over the course of the year going forward, equaling more dividends! Those are some good names you are watching. I could use more in the financial sector as well. As always, I appreciate the comment!

  7. Solid pick up. I still don’t hold T or VZ in my portfolio but understand why you went with T now. There’s no shortage of bad news for T nor GE or GIS, HRL, CAH and the like. A lot of normally solid companies going on sale these days. Keep building that passive income stream.
    DivHut recently posted…Dividend Income Update October 2017My Profile

    1. That is surprising you don’t own any T or VZ. Any particular reason for that? I know what you mean. Those are all solid choices. I own them all and could easily reduce my cost basis on them all at this time. Just too bad they are all low at the same time and there isn’t enough free capital to go around to them all so have to pick and choose. But any buys help toward those dividend income goals.

      1. I see T and VZ as “tech” companies in an ever changing landscape offering a service that has been racing towards zero for the last 20 years. There’s only so many more subscribers you can get for your service and with each passing year each is offering more service for less income. Think about having a T cel phone 20 years ago. You paid $40 or $50 a month for 30 minutes of talk. Then more talk comes, then some text, then data. Today, it’s all unlimited talk, text and data for less and less each month not to mention additional services packaged in for “free.” I just don’t know what the fitire hold for these companies long term.
        DivHut recently posted…Dividend Income Update October 2017My Profile

        1. That is a good point. I also consider them “tech” companies and actually lump them into that sector on my portfolio instead of telecommunications. At least these companies are diversifying their own portfolios, ex T buying Direct-TV. So it isn’t only phones they carry. And with the merger, if that goes though, it will open up new sources of income moving forward. I still think it has a few years to go anyway, so why not collect in the mean while I guess?

  8. Hi Dividend Daze,

    What other metrics do you use when you make a purchase? Although yield is important isn’t there more to the story? The company needs to keep growing to increase the payout or sustain the business they currently have. What path to success do you see for that on T?

    Thanks,
    DM

    1. That is a great point. Yield is nice, but future long term growth is better. T has been a while and has great history. They have been expanding their portfolio with the acquisition of Direct-TV, and the potential merger with Time Warner. I see the deal going through which will open up a lot of new sources of income for them. Look at time warner’s portfolio alone. For one they own DC comics. Look how much money Disney is bringing in every year with their movies, Marvel in general. That is brand new that T can start collecting on. With owning some of the channels and not just the service, they can make better packages for customers providing more value to create new growth. I think they are trying their best to stay competitive in an ever changing market. What are your thoughts on T?

  9. Woho! Another DGI friend who has bought T! Seems like we all just agree once there is a “bargain” in the market. Glad to be a fellow shareowner with you here Daze!

    1. Happy to be a fellow shareholder as well. Can’t pass up an opportunity like this. I have seen a bunch of us buy it recently. Great value in this market right now. Nice to see you pick some up as well!

  10. Still pondering my add on buy of T. I already have a large position, so I’m not sure if I want to add more. I respect DivHut’s views above and think they have validity. I also see in the recent news this week that US antitrust regulators are challenging the Time Warner takeover. Appreciate the post and all the reader comments. Have a great weekend! Tom
    Tom @ Dividends Diversify recently posted…Why Your Investment Portfolio Is Like a GardenMy Profile

    1. That is why the price is the way it is right now, uncertainty. No one knows what will happen with the merger. If it goes though, well I will be glad I stocked up on them. If it doesn’t, they can still at least cover their dividend for the time being, so might as well collect and DRIP more shares while the price is low. I always respect DivHut’s views and there is so much value in the market now, it should be easy to make some buys if T is not your style. I am also looking at HRL, CAH, GIS, etc. Those are a little safer if you prefer. Looking forward to seeing what you buy next!

    1. Nice work. You got an even better price than I did. That was about the bottom of the dip too. Nicely timed! Can’t wait to see these pay out next year. Thanks for the comment!

    1. Thanks! Seems like everyone is taking advantage of the opportunity. Looking forward to seeing your post about your next buy.

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