Telecom giant AT&T Inc. (T) on Wednesday announced a small raise to its quarterly dividend payout and unveiled plans for a new $14 billion investment to upgrade its wireless and wireline broadband network operations.
The Dallas-based company lifted its dividend by 2.3%, marking the 29th consecutive yearly dividend increase. The new dividend of 45 cents per share (up from 44 cents) will be paid on Feb. 1, 2013 with an ex-dividend date of Jan. 8, 2013.
CEO Randall Stephenson commented, “Given our confidence in our industry and in our future, today we increased our quarterly dividend for the 29th straight year. I’m confident we can continue to deliver for our owners as we invest to position AT&T for stronger growth in the years ahead.”
The investment Stephenson referred to is a new $14 billion plan to expand and enhance AT&T’s wireless and wireline broadband networks. Dubbed “Project Velocity IP (VIP),” the plan is aimed at improving Internet speed, allowing for additional services, and boosting overall broadband revenue.
The company commented, “This is a major commitment to invest in 21st Century communications infrastructure for the United States and bring high-speed Internet connectivity — 4G LTE mobile and wireline IP broadband — to millions more Americans. We have the opportunity to improve AT&T’s revenue growth and cost structure for years to come, and create substantial value for shareowners.”
AT&T shares fell 80 cents, or -2.3%, in premarket trading Wednesday.
The Bottom Line
Shares of AT&T (T) will now have a 5.17% dividend yield, based on the higher dividend payout and last night’s closing stock price of $34.80. We have been recommending shares of AT&T (T) since Mar.12, 2009, when the stock was trading at $23.35.
AT&T Inc. (T) is a “Recommended” dividend stock, holding a Dividend.com DARS™ Rating of 3.5 out of 5 stars.