For Immediate Release
Chicago, IL - December 20, 2011 - Zacks.com announces the list
of stocks featured in the Analyst Blog. Every day the Zacks Equity
Research analysts discuss the latest news and events impacting
stocks and the financial markets. Stocks recently featured in the
blog include
AT&T Inc.
(
T
),
Verizon Communications
Inc.
(
VZ
),
CenturyLink Inc.
(
CTL
),
Windstream Corporation
(
WIN
) and
Frontier Communications
(
FTR
).
Get the most recent insight from Zacks Equity Research with the
free Profit from the Pros newsletter:
http://at.zacks.com/?id=5513
Here are highlights from Monday's Analyst Blog:
AT&T Hikes Dividend, Risks Remain
Investing in telecom stocks seems risky as the global market
faces the threat of yet another recession. While we await a
political resolution to the Euro-zone sovereign debt crisis, the
contagion is spreading globally, weighing on economic growth. The
problems in Europe are swelling and spilling over to the rest of
the world and might even stall the slowly moving U.S. economy.
In the ongoing turmoil, dividend-paying stocks appear safe
investments. These stocks must necessarily have strong financials
and the companies should have the ability to invest further for new
developments. In this regard, we believe this is the right time to
buy telecom stocks paying higher dividends as these companies would
emerge stronger when the economy recovers.
Let us move to
AT&T Inc.
's (
T
) investment consideration and dividend analysis, which is
currently the hot pick in the entire telecom sector.
The second-largest U.S. mobile service provider hiked its annual
dividend by 2.3% to $1.76 per share, reflecting its strong
commitment to deliver increased returns to its shareholders.
AT&T will now pay a quarterly dividend of 44 cents compared
with 43 cents paid this year. This marks the 28
th
consecutive year of dividend hike. Last year, AT&T increased
its annual dividend twice, bringing it to $1.72 per share.
The new dividend will be paid on February 1, 2012 to
shareholders of record as of January 10, 2012. The new annual
payout of $1.76 represents a dividend yield of 6.1%. This is higher
than its key rival and the largest U.S. mobile service provider
Verizon Communications
Inc.
(
VZ
), which raised its annual dividend by 2.6% to $2 per share in
September, reflecting a dividend yield of 5.20%.
AT&T distributed $7.6 billion and $9.9 billion as dividends
to its shareholders in the first nine month of this year and fiscal
2010, respectively. By comparison, Verizon paid dividends of a
respective $4.1 billion and $5.4 billion in the first nine months
of this year and fiscal 2010.
Other telecom service providers such as
CenturyLink Inc.
(
CTL
),
Windstream Corporation
(
WIN
) and
Frontier Communications
(
FTR
) currently offer high dividend yields of 8.2% 8.6% and 15.20%,
respectively.
The dividend hike reveals AT&T's solid financial position,
with a healthy balance sheet and growing free cash flows. Strong
yields and continued profit generation notwithstanding, we believe
AT&T is an unsafe stock to invest in as the company is battling
its ambitious $39 billion takeover of T-Mobile, announced in March.
AT&T plans to take a $4 billion charge in the fourth quarter
against the takeover, which has heightened risks of failure.
We are maintaining our long-term Neutral recommendation on
AT&T. For the short term (1-3 months), the stock retains a
Zacks #3 (Hold) Rank.
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CENTURYLINK INC (
CTL
): Free Stock Analysis Report
FRONTIER COMMUN (
FTR
): Free Stock Analysis Report
AT&T INC (
T
): Free Stock Analysis Report
VERIZON COMM (
VZ
): Free Stock Analysis Report
WINDSTREAM CORP (
WIN
): Free Stock Analysis Report
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