The biggest dividend in America

This company pays out more -- over $10 billion a year -- than any other in the US.

By TheStockAdvisors Apr 6, 2012 10:24AM
By Amy Calistri, The Daily Paycheck

AT&T (T) pays more dividends than any other company in America. In total, it distributes over $2.5 billion every quarter, or about $10.2 billion each year.

And this isn't some special one-time dividend. This company has paid a dividend for decades... and raised payments for 28 consecutive years, even through the 2008-2009 downturn. Right now the stock pays a 5.6% yield. But dividends are growing quickly. In the past decade, the dividend payment is up 72%.

That dedication to dividends has paid off. Today, AT&T pays more in dividends than any other company in America.

I don't think I need to tell you too many details about AT&T's business for you to know where those dividends come from. As one of the nation's largest telecoms, the company earns a bundle in recurring revenue for providing wireless, digital cable, and Internet services.

But can the company continue to pay its massive dividends ... and continue to grow them?

AT&T certainly seems confident it can. In fact, in January the company announced a $9 billion buyback plan (equal to about 5% of shares outstanding). Reducing the share count will allow for more flexibility in meeting the dividend.

Meanwhile, the rise of smartphones has business booming. Last quarter, smartphone activations were up 60% year-over-year, helping lead to a 10% rise in wireless revenues.

But the truth is, AT&T's yearly results were down in 2011 compared to 2010. In fact, the company saw net income of just $0.66 per share for the year -- well below the $1.76 per share it pays in dividends.

The main reason for its low earnings is one-time events that occurred in the fourth quarter: pension charges and a break-up fee from its failed buyout of T-Mobile. Taking out those one-time expenses, the company earned $2.20 per share -- more than enough to cover the dividend.

There's no doubt AT&T is facing some headwinds. Large debt and a capital-intensive business take up money that could otherwise be used for dividends.

But there is also little doubt the company is dedicated to paying -- and increasing -- dividends to its investors.

After all, you don't pay more than $10 billion a year in dividends if you aren't serious about putting money in your investors' pockets.

I own AT&T for my $200,000 real-money Daily Paycheck Portfolio.

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16Comments
Apr 7, 2012 10:12PM
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The comments so far show what idiots most people have become.  Why not buy some stock like I did 15 years ago and use dividend re-investment.  I now get over 7500 per year in retirement and my income goes up every time they raise the dividend.  The initial investment wasn't that large and if you are younger when you start the build-up can be substantial.
Apr 8, 2012 10:17PM
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Complain, complain, complain...........i​f you were smart, you'd invest in American companies and take their quarterly dividends to the bank.  But, of course, you'd complain about the banks.  You'll never be happy!

Apr 9, 2012 7:51AM
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Hey rond322,

Better check your source, I've gotten my didvened checks every quarter, last one on 2/1/12.

They haven't missed a dividend payment even through teh 2008-2010 market nor did they reduce it.

Apr 9, 2012 10:58AM
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I'm not a 1% person, but every one in my family has a nice house, food and car. And they all work, there  I go again using a 4 letter word.
Apr 8, 2012 10:18PM
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By the way, I'm not one of the 1%ers and I still feed my family.
Apr 9, 2012 3:48AM
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I've got a six pack of Budweiser and an American dream
Apr 9, 2012 8:43AM
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That will teach me to trust the MSN Money charts Embarrassed
Apr 9, 2012 12:06PM
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OSU - Robert - Right!

And, Why should it bother anyone?  Answer, Greed.

Apr 8, 2012 9:31AM
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Apple initiated a dividend beginning in July with an estimated annual payout of $10B.  They also announced a stock buyback program worth $10B. So watch out AT&T, there's a new huge dividend payer in town.
Apr 6, 2012 7:53PM
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Ever wonder why they outsource so many jobs.. !?
Apr 6, 2012 7:34PM
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and i wonder why my phone bill is so high...
Apr 6, 2012 5:39PM
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How about paying the debt? That seems smarter.
Apr 9, 2012 4:32AM
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I wonder if Amy Calistri realizes that AT&T has not paid a dividend for the last 4 qtrs. The last one was 4/6/2011.
Apr 6, 2012 7:54PM
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Watch the next time their workers want a raise to keep up with inflation.. You will see exactly the problem with the wall street run economy !
Apr 6, 2012 7:46PM
Apr 8, 2012 9:17PM
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How is this helping the 99% American People? They can't even afford groceries because of corrupt oil corporates and all their affiliates! What about us! What the hell did we do to deserve this kind of treatment! ALL WE DID WAS MAKE THE CORPORATES SUCCESSFUL, but they won't give anything  back! Nothing but CAPITALISTIC GREED! And as long as their is CAPITALISM, there will be CORRUPTION BECAUSE OF THE INHERENT GREED!!
We, the 99% American People, are at the breaking point; we can't feed our families! CAN YOU UNDERSTAND THAT??? It's time for change, and that time is NOW! Not later, but right NOW!

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