I'd say it's no stretch to call
one of the more reliable dividend-growth stocks on the market.
The large telecom has continually paid dividends for the past 100
years, and has consistently raised that dividend annually for the
past 28 years.
Dividend growth is unlikely to abate, because AT&T
dominates its market. It operates the largest 4G network -
covering 275 million users. It also offers the largest
international and domestic WI-FI coverage of any U.S. wireless
AT&T is, as you'd expect, big. It generates $130 billion
in revenue annually. Size confers a degree of safety and also an
economy of scale that can produce tremendous amounts of cash.
In fact, AT&T generated record cash of $39.2 billion from
its operations last year.
When you generate big cash, you can return big cash to your
shareholders. In 2012, AT&T repurchased 371 million shares,
or roughly 6% of shares outstanding, for $12.8 billion. This
year, management expects to buy back another 300 million
Of course, AT&T also returns big cash to its shareholders
through its dividend. In 2012, it returned over $10.2 billion to
shareholders. This year, AT&T investors will receive a
generous $1.80 dividend per share, which produces a 4.6%
A 4.6% yield is exceptional in this market, particularly
considering the S&P 500 yields around 2% and the 10-year
Treasury notes yield around 1.7%. When AT&T's size and safety
are factored in, the yield becomes even more impressive because
AT&T is such a low-risk investment.
Even though it's a safe, high-yield investment, AT&T still
offers exceptional return potential. In a little more than a
year, it has generated a 30% total return.
But what if I told you that you could increase your income and
yield on AT&T by 75% or more each year? And what if I told
you that you could collect this extra income every few months in
addition to your regular quarterly dividend?
I'm referring to an option strategy known as a covered call,
which allows you to collect extra income from a conservative
dividend stock like AT&T.
When I mention "options" to many investors, they reflexively
think of risky investments that are only for speculators.
Nothing could be further from the truth.
An option is simply a contract to buy or sell shares of a
stock at an agreed upon price (the strike price) at a future
date. Options can be used to control large blocks of stock for a
small price. But they also can be used to earn income or reduce
risk. Best of all, options are traded as easily as any
With a covered-call strategy, you buy shares of a specific
stock and then sell a call option on that same stock. By doing
so, you agree to sell the position at a future date and price to
another investor. In exchange for giving the other investor the
right to purchase the shares at a future date and price, you earn
a premium in the form of a one-time upfront payment - the extra
So how does a covered-call strategy work with AT&T?
First, you need to own at least 100 shares of an AT&T. I
say that because 100 shares of stock equal one option
contract. Once you own the 100 shares, you're ready to
start generating extra income.
Now, let's create the income-generating scenario: AT&T
trades at $38.95, which produces the 4.6% yield. By selling
one covered call contracts against a 100 shares of AT&T, you
can earn an extra $23 every two months.
So every 60 days, you give yourself the potential to collect
$23 against 100 shares of AT&T. Annually that equates to $138
of extra income. This strategy adds about 75% to the dividends
AT&T will pay on that 100 shares this year.
So by implementing a covered-call strategy, you've taken an
already high-yield investment, AT&T, and boosted your
potential income to $3.18 per share from $1.80 a share and your
yield to 8.2% from 4.7%.
Are you interested in earning more income from AT&T? Would
you like to earn more from other safe, blue-chip dividend stocks
that you already own? If so, then I'd like to help you.
Tomorrow at 2 pm ET, I'll be hosting a live teleconference
event. This investing seminar - "
Double Your Dividends with Stocks You Already
- is a free teleconference that is available to
During this event, I'll show you exactly how you can earn more
income from Pfizer and other blue-chip dividend stocks. If you
want to learn more about this investing strategy for earning more
income, I invite you to
for the teleconference event.
now to secure your spot today!