The shares of telecommunications giant AT&T are currently 24.35% up year-to-date, and analysts expect to surge even higher based on the company’s improved outlook after a couple of years of underperformance. However, according to the company’s CEO, John Stankey, AT&T stock is about to become even more attractive to investors for an unrelated reason.
Speaking at the Goldman Sachs Communacopia and Technology Conference earlier this week, Stankey said he believes AT&T stock will look increasingly appealing to investors following expected interest rate cuts by the Federal Reserve due to its dividend yield of 5.17%.
“We have a very attractive dividend out there on our stock. And when interest rates start to go down, our dividend even looks all that much better,” Stankey shared via Yahoo Finance.
The expectation is that lower rates will prompt investors to look for stocks that can bring them a steady income.
Dividend yield marks the financial ratio that shows how much income in dividends an investor will have on an annual basis for every dollar it has invested in a particular stock. For example, AT&T stock’s 5.17% dividend yield amounts to $1.11 in dividends paid out for every share.
AT&T slightly missed expectations on revenue in the second quarter, recording $29.8 billion compared to $29.9 billion expected. However, its adjusted earnings per share came in line with expectations at $0.57 per share while the company saw significant additions in postpaid phone net and fiber net divisions as well as a rise in mobility services sales.