Today’s purchase: AT&T

Some of the best performers in my portfolio are companies with lowish yields, low payout ratios and a history of big-time dividend raises. One of the companies that paid me a dividend yesterday, Texas Instruments, is a great example. Its 2.47% yield isn’t anything special, but it’s been boosting its dividend by 24.99% annually over the course of the last five years.

It’s also appreciated by more than 45% since I’ve owned it.

Those – companies with great dividend growth and impressive capital appreciation – are always at the top of my shopping list.

Sometimes, though, I get a little greedy and go straight after the cash. Today was one of those days as I picked up a share of AT&T (T) for $36.05.


AT&T is like the anti-Texas Instruments in that its share price has gone in the opposite direction (down 4.8%) over the last year or so and the dividend hasn’t been getting much of a boost, either.

That doesn’t mean it’s a bad stock to buy, though. I have a ton of growth stocks in my portfolio, but I’ve been on a cash kick recently and, well, AT&T certainly scratches that itch.

With an annualized dividend of $2 (5.50% yield), the company is dishing out some serious cash to shareholders. The growth has been pretty pathetic compared to that of companies like Texas Instruments, but who needs growth when you’re already getting a yield of more than 5%?

AT&T serves as very specific purpose: to throw cash my way so I can buy more dividend-paying stocks. That said, it’s served its purpose quite nicely so far. I mean, I think we can all find some room in our portfolios for cash cows like AT&T, right?

Today’s purchase bumped my position to 18 shares while lowering my cost-basis to $37.94. Combined, the shares are worth $659.34 (3.98% of my portfolio).

More importantly, they create $36 of forward annual income.

March on!

Leave a Reply

%d bloggers like this: