AT&T’s Dividend Yield Exceeds 4%: What Investors Should Know

In Thursday’s trading, AT&T Inc (Symbol: T) saw its shares yield above 4%, based on a quarterly dividend that annualizes to $1.11. During the trading session, shares dipped to as low as $27.65. The significance of dividends for investors cannot be overstated, as historically, they have contributed significantly to the stock market’s total return.

To provide context, consider this example: if you had invested in the S&P 500 ETF (SPY) on December 31, 1999, the purchase price per share was $146.88. By December 31, 2012, that same share was valued at $142.41, resulting in a decline of $4.67 over that period. However, during those years, you would have received $25.98 per share in dividends. This leads to a positive total return of 23.36%. Even with dividends reinvested, the average annual return remains around 1.6%. In this light, a yield exceeding 4% appears considerably attractive provided it is sustainable. As a member of the S&P 500, AT&T Inc holds a recognized position among the large-cap companies within the index.

Dividend History and Future Expectations

Predicting dividend amounts can be challenging, as they often fluctuate with a company’s profitability. Evaluating AT&T Inc’s historical dividend performance can help investors gauge the likelihood of maintaining the recent dividend and whether a 4% annual yield is a reasonable expectation.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.