Summary
- Ongoing worries regarding the turnaround in AT&T's EBITDA segment and a heavy debt load have created a gift for long-term dividend investors.
- Despite substantial risk, the opportunity of grabbing AT&T at a 6.4% yield is just too enticing to ignore.
- 2019 is a decisive year, and once AT&T makes progress regarding its three core priorities, the stock price will finally reflect that as well.
After having had to endure two disastrous years, AT&T's (NYSE:T) investors so far have little to complain in 2019. Although the stock is slightly lagging the S&P 500 with its YTD total return of 13.65% vs. 11.7% for AT&T, this is much better than anything that happened in the two preceding years.
(Source: AT&T Investor Relations)
Following the carnage that was created back then, AT&T is still boasting an eye-popping 6.4% yield despite having nicely recovered from its firesale-like low of $26.80 set in December 2018. It remains my largest portfolio position, and despite having halved my unrealized losses, it is the worst performing position. However, it has generated substantial income for me, and by reinvesting the dividends like clockwork, this will grow into an even more sizable position.
Back in 2017, I would not have imagined to be able to buy AT&T at current prices, yet two years later, AT&T is the highest-yielding mega-cap stock and trading at dirt-cheap valuations.
