Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Trump Stocks and Crypto Mania 2025 Incoming as Bitcoin Breaks Above $100k - 8th Dec 24
Gold Price Multiple Confirmations - Are You Ready? - 8th Dec 24
Gold Price Monster Upleg Lives - 8th Dec 24
Stock & Crypto Markets Going into December 2024 - 2nd Dec 24
US Presidential Election Year Stock Market Seasonal Trend - 29th Nov 24
Who controls the past controls the future: who controls the present controls the past - 29th Nov 24
Gold After Trump Wins - 29th Nov 24
The AI Stocks, Housing, Inflation and Bitcoin Crypto Mega-trends - 27th Nov 24
Gold Price Ahead of the Thanksgiving Weekend - 27th Nov 24
Bitcoin Gravy Train Trend Forecast to June 2025 - 24th Nov 24
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

This Dividend Aristocrat Is Leading the 5G Revolution

Companies / Mobile Technology Jul 22, 2019 - 07:14 PM GMT

By: Robert_Ross

Companies Wireless technology has come a long way.

The first generation of wireless—called 1G—rolled out in the 1980s. The only thing you could do with it was make a phone call. And the call quality rivaled that of two tin cans connected by a string.

Since then there’s been a new generation of wireless tech about every 10 years. 1G gave way to 2G, then 3G and 4G—each generation faster and more reliable than the last.

Now we’re arriving at 5G. The rollout should be complete around June 2020.

This new technology will let phones and computers communicate 1,000X faster than 4G. It will also make everything from self-driving cars to remote surgery possible.


As with any new technology, investors are clamoring for the “best” way to profit from this trend. That means different things for different people…

The Safest Way to Profit from the 5G Revolution

Some investors are looking for that “moonshot” stock. You know, the one that might quickly shoot up 100% or more.

Of course, those kinds of wins are great. If one of my stocks shoots up 100%, I’m thrilled.

But let’s face it, they’re called moonshot stocks for a reason: They’re not all that safe. You might make a lot of money. But you might lose a lot of money, too.

That’s not what I’m after.

Instead, we’re focused on safe and reliable dividend-paying stocks. But that doesn’t mean we have to sit on the sidelines.

That’s where telecom giant AT&T (T) comes in…

The First Company to Roll Out 5G

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

It was also the first provider to start rolling out 5G technology. The company expects to complete its 5G nationwide network in 2020.

AT&T will also directly benefit as other wireless providers roll out 5G.

See, around a third of Americans are AT&T customers. And all of their data will be transferred on the company’s infrastructure. So the more data transferred—the more people call, text, download YouTube videos, and do the thousands of other things we now do on our phones—the more money AT&T will make.

But that’s not the only reason to like AT&T, especially if you’re an income investor.

First off, AT&T pays a huge 6% dividend yield. That’s over three times the dividend yield on the S&P 500.

It’s also part of an elite group called the Dividend Aristocrats. These are companies that have increased their dividends for at least 25 consecutive years.

AT&T has increased its dividend 34 years in a row now. That’s incredible. In fact, only 40 companies in the S&P 500 have raised their dividends longer and more consistently than AT&T.

Safer than the Competition

Over three decades of consistent dividend increases means AT&T’s dividend is certainly reliable. But it’s also safe, as I’ll show you in a moment.

That’s extremely important. If a company cuts its dividend, its share price is going to crater.

Not good.

As a general rule, the higher the dividend yield, the less safe it is. So, when I saw AT&T’s 6% dividend yield, the first thing I did was plug it into the Dividend Sustainability Index (DSI), my proprietary tool for measuring dividend safety.

The DSI looks at three key things: payout ratio; debt-to-equity ratio; and free cash flow. I’ll walk you through each one.

The payout ratio tells you how much of a company’s net income it pays out to shareholders as dividends. The lower the payout ratio, the better.

Next is the debt-to-equity ratio. No surprise, the more debt a company has, the harder it is to run a business. That includes paying the dividend.

The last thing the DSI looks at is free cash flow. This is the amount of cash the company has left after it pays expenses.

AT&T excels in all three categories. For perspective, I compared AT&T’s DSI score to three major competitors, and it blows them out of the water:



Not only does AT&T pay a higher dividend than these companies, its dividend is also safer.

Only time will tell which “moonshot” 5G stocks soar and which ones plummet. As income investors, we’re not interested in those kinds of risky gambles.

Instead, we’ll play the 5G trend by investing in safe and reliable dividend payers like AT&T.

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.

Until next time,

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.


© 2005-2022 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