Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
US Economy and Stock Market Addicted to Deficit Spending - 17th Oct 21
The Gold Price And Inflation - 17th Oct 21
Went Long the Crude Oil? Beware of the Headwinds Ahead… - 17th Oct 21
Watch These Next-gen Cloud Computing Stocks - 17th Oct 21
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21
China / US Stock Markets Divergence - 10th Oct 21
Can US Save Taiwan From China? Taiwan Strait Naval Battle - PLA vs 7th Fleet War Game Simulation - 10th Oct 21
Gold Price Outlook: The Inflation Chasm Between Europe and the US - 10th Oct 21
US Real Estate ETFs React To Rising Housing Market Mortgage Interest Rates - 10th Oct 21
US China War over Taiwan Simulation 2021, Invasion Forecast - Who Will Win? - 9th Oct 21
When Will the Fed Taper? - 9th Oct 21
Dancing with Ghouls and Ghosts at Alton Towers Scarefest 2021 - 9th Oct 21
Stock Market FOMO Going into Crash Season - 8th Oct 21
Scan Computers - Custom Build PC 6 Months Later, Reliability, Issues, Quality of Tech Support Review - 8th Oct 21
Gold and Silver: Your Financial Main Battle Tanks - 8th Oct 21
How to handle the “Twin Crises” Evergrande and Debt Ceiling Threatening Stocks - 8th Oct 21
Why a Peak in US Home Prices May Be Approaching - 8th Oct 21
Alton Towers Scarefest is BACK! Post Pandemic Frights Begin, What it's Like to Enter Scarefest 2021 - 8th Oct 21
AJ Bell vs II Interactive Investor - Which Platform is Best for Buying US FAANG Stocks UK Investing - 7th Oct 21
Gold: Evergrande Investors' Savior - 7th Oct 21
Here's What Really Sets Interest Rates (Not Central Banks) - 7th Oct 21
CISCO 2020 Dot com Bubble Stock vs 2021 Bubble Tech Stocks Warning Analysis - 6th Oct 21
Precious Metals Complex Searching for a Bottom - 6th Oct 21
FB, AMZN, NFLX, GOOG, AAPL and FANG+ '5 Waves' Speaks Volumes - 6th Oct 21
Budgies Flying Ability 10 Weeks After wings Clipped, Flight Feathers Cut Grow Back - 6th Oct 21
Why Silver Price Could Crash by 20%! - 5th Oct 21
Will China's Crackdown Send Bitcoin's Price Tumbling? - 5th Oct 21
Natural Gas News: Europe Lacks Supply, So It Turns to Asia - 5th Oct 21
Stock Market Correction: One More Spark to Light the Fire? - 5th Oct 21
Fractal Design Meshify S2, Best PC Case Review, Build Quality, Airflow etc. - 5th Oct 21
Chasing Value with Five More Biotech Stocks for the Long-run - 4th Oct 21
Gold’s Century - While stocks dominated headlines, gold quietly performed - 4th Oct 21
NASDAQ Stock Market Head-n-Shoulders Warns Of Market Weakness – Critical Topping Pattern - 4th Oct 21
US Dollar on plan, attended by the Gold/Silver ratio - 4th Oct 21
Aptorum Group - APM - High RIsk Biotech Stocks Buy, Sell, Hold Investing Analysis for the Long-run - 3rd Oct 21
US Close to Hitting the Debt Ceiling: Gold Doesn’t Care - 3rd Oct 21
Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
Original Oculus VR HeadSet Rift Dev Kit v1 Before Facebook Bought Oculus - 3rd Oct 21
Microsoft Stock Valuation 2021 vs 2000 Bubble - Buy Sell or Hold Invest Analysis - 1st Oct 21
How to profit off the Acquisition spree in Fintech Stocks - 1st Oct 21
�� Halloween 2021 TESCO Shopping Before the Next Big Panic Buying! �� - 1st Oct 2
The Guide to Building a Design Portfolio Online - 1st Oct 21
BioDelivery Sciences International - BDSI - High RIsk Biotech Stocks Buy, Sell, Hold Investing Analysis for the Long-run - 30th Sep 21
America’s Revolving-Door Politics Behind the Fall of US-Sino Ties - 30th Sep 21
Dovish to Hawkish Fed: Sounds Bearish for Gold - 30th Sep 21
Stock Market Gauntlet to the Fed - 30th Sep 21
Should you include ESG investments in your portfolio? - 30th Sep 21
Takeda - TAK - High RIsk Biotech Stocks Buy, Sell, Hold Investing Analysis for the Long-run - 29th Sep 21
Stock Market Wishing Away Inflation - 29th Sep 21
Why Workers Are NOT Returning to Work as Lockdown's End - Wage Slaves Rebellion - 29th Sep 21
UK Fuel PANIC! Fighting at the Petrol Pumps! As Lemmings Create a New Crisis - 29th Sep 21
Gold Could See Tapering as Soon as November! - 29th Sep 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

This Stock Is as Safe as Coca Cola but Pays a 6.4% Dividend

Companies / Dividends May 01, 2019 - 02:31 PM GMT

By: Robert_Ross

Companies

I bet you’ve never heard of Pat Munroe.

And unless you’re from the Florida Panhandle, I imagine you haven’t heard of Quincy, Florida, either.

But the two can teach us a lot about investing.

See, in the early 1920s, Munroe was a banker in Quincy.

One thing Munroe noticed was no matter how hard the times, the people of his small town always seemed to have money to buy a Coca-Cola.

So he started buying shares of the company. Not long after, he was telling everyone in town to buy shares of Coca-Cola.


He’d even underwrite bank loans backed by Coca-Cola stock.

When shares crashed 50% during a conflict with the sugar industry, Pat kept telling people to buy Coca-Cola.

And then the Great Depression hit.

Keeping Your Eye on the Long-Run

From September 1929 to July 1932, the Dow Jones Industrial Average lost 89% of its value. But something remarkable happened.

Even though unemployment was near 20% in 1931, Coca-Cola sales fell a mere 2.3%.

As Munroe had learned early on, people would spend their last nickel on a Coca-Cola.

And since the company had $6.5 million in cash—over $100 million in today’s dollars—and no debt prior to the crash, Coca-Cola had no problem paying its dividend.

For the people of Quincy, that meant they could keep their heads above water.

Once the economy recovered, Munroe and his town continued to buy shares of Coca-Cola.

And Coca-Cola shares continued to surge.

By the late 1940s, Quincy, Florida became the richest town per capita in the entire United States.

Munroe’s sage advice in the 1920s had minted 67 “Coca-Cola Millionaires” in Quincy, Florida.

And many of these early investors still hold their shares today.

At least I hope they still do; a single share with dividends reinvested bought pre-Great Depression would be worth over $10 million today.

There are a few lessons to be learned here.

The first is investors should focus on well-capitalized companies that pay steady dividends. When reinvested, these slow-growth companies can earn investors big money over the long haul.

Second, you want to buy into companies that can sell their products no matter what’s happening in the economy.

Lucky for you, I found a company that does just that.

Smartphones: The Opiate of the Masses

While soft drink sales are stagnating, there is a new guilty pleasure for the public: smartphones.

It’s no secret that people are addicted to their phones.

Whether they’re strolling down the sidewalk, driving a car, or out to dinner with friends, just about everyone seems glued to their phones.

Internet addiction has already infiltrated society. That’s a fact.

And the companies who provide the underlying infrastructure for these phones are sure to keep profiting, even in a bear market.

There’s only one company that pays a dividend over 6.4% and supplies smartphone infrastructure.

That company is AT&T Inc. (T).

AT&T Inc. (T): an All-Weather Dividend of 6.4%

AT&T is the second-largest wireless carrier in the US.

The company connects more than 100 million devices, including over 80 million prepaid phones.

All in all, its wireless business accounts for 43% of AT&T’s sales.

The company also has a consumer and entertainment segment. This area brings in 32% of sales and includes its DirectTV satellite television business and WarnerMedia.

Its other revenue comes from fixed-line phones (20%), Latin American satellite television (3%), and Mexican wireless services (2%).

Diversification Is Key

AT&T has several things working in its favor.

The first is how diverse the company is. Unlike its main competitor Verizon Communications Inc. (VZ), AT&T has its hands in a strong mix of services.

The company gets most of its income from its wireless business. This gives the company a steady stream of cash that will grow as more people use smartphone data.

AT&T has been growing its content division, buying DirectTV and Time Warner in the last three years.

AT&T is also set to be the first provider to roll out 5G technology. This next generation of wireless technology will be 1000X faster than today’s 4G.

Not only will more data be flowing over AT&T’s system, but it will own much of the data as well.

AT&T Is a Bargain Now

The stock now trades at 30.7, which is a cheaper valuation than its peers on nearly every measure.



And yet the company pays a much higher dividend yield.

Better still, AT&T has raised its dividend for 35 years in a row.



A company that earns tons of cash, pays a 6.4% dividend, and has a payout ratio below 80%... that’s how you know you’ve got a bargain.

The Sin Stock Anomaly: Collect Big, Safe Profits with These 3 Hated Stocks

My brand-new special report tells you everything about profiting from “sin stocks” (gambling, tobacco, and alcohol). These stocks are much safer and do twice as well as other stocks simply because most investors try to avoid them. Claim your free copy.

By Robert Ross

© 2019 Copyright Robert Ross. - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in