We received US$119.38 (49 cents x 243.63 shares). The recent dividend increase by a penny from last quarter’s dividend and it is expected to be the same dividend payment for the next 3 quarters. Since 2004, AT&T has been constantly increasing its dividend but starting in 2008, the company is annually increasing dividends by just 4 cents. As US telecom market is saturated and telecom companies are struggling to find a big way to grow, dividends payment will still be conservative in the future (increased by 4 cents annually and no surprise growth). The dividend yield is 4.66%, close to its 5-year low mark, as YoY stock price gains by +24%.
Dividend payout is still high at 0.90 though historically, AT&T is consistently increasing their dividends since 2004. On a 10 year period, dividend grew by 3.20% but let’s be cautious in the recent growth. Despite a comfortable thought of an increasing dividend, the increase is at a diminishing pace as 2016 dividend growth is 2.10% down from 2.17% (2015) and 2.22% (2016). It will be interesting to watch out the sustainability of 4 cents annual increase in dividends as investors may have concerns on a diminishing dividend growth but then among telecom companies, AT&T is most suitable as our dividend champion.