I am adding AT&T to my Big Bet Stock Picks on 10/12/2015 at a price of $33.26. This is a company that you buy mainly for the 5.6% dividend with the hope that its stock price will slowly go up as well. I think it can do that.
In times of near 0% interest rates (and things will essentially stay that way for a long time no matter what the Fed does) stocks with safe dividends are more enticing. You can find ones with higher dividend percents but chances are they won’t be as safe and solid as I think AT&T is. That is why if you have money sitting on the sideline that you don’t have earmarked for riskier options, you might do well buying T to make that 5%+ interest.
Why Is AT&T A Good Buy?
AT&T stock has traded in a narrow range of about $31 to $36.5 for two years now. Buying it now at the low end $33 price has been a winning strategy for a while and even with the market as unstable as it is, the stock probably won’t go too much lower if the bottom falls out of everything. But why I like this stock is because they are slowly transitioning from a cell service and internet provider into a company that will sell all sorts of things around their core businesses. They are seeing that future growth has to come from the Internet of Things (IOT) and trying hard to position themselves as a leader for years to come in that space.
AT&T plans on slowly changing their stores to include many items that aren’t cell phone related. They are also expanding into Best Buy’s stores (along with Verizon) and will sell a wide array of products that are related to IOT. AT&T hopes you will eventually see them as a solution to most of your technology needs and is preparing to have a presence that you can find wherever you are.
Whether the company will ultimately be successful at all of this is of course unknown but it is important that they are spending the money and effort now before it is too late. Again, it is the dividend that really makes this a Big Bet Stock pick because it is should be safe and is significantly higher than what you get at the bank or with most other stocks.