My Stock Portfolio: AT&T

I've said before that I firmly believe that the best investment strategy for most people, me included, is to invest in a diversified portfolio of index mutual funds.  You should pick an asset allocation ratio (what percent of your money is in stocks vs bonds, and foreign vs domestic) set it, and generally leave it alone.  Invest regularly and do not try to time the market.  If you do this I can almost guarantee you:

• You are not going to double your money in a year or two
• You are not going to lose money, in the long run
• You will have up years and down years, but if you don't sell during the down years, you will eventually recover (and then some)
• 
  

That being said, I personally find the stock market to be fascinating and I like playing around with it.  We allocate a very small percent of our assets to purchasing individual stocks using low-fee or no-fee brokers.  Robinhood allows you to purchase individual shares of most companies in realtime for no commissions.  Robinhood also allows you to set stop loss, limit buys and limit sell orders.  If you use my Robinhood link, you will get one free share of stock, and so will I.  What have you got to lose?

This article will begin a periodic series on the individual stocks in which I have invested.  These articles are not a recommendation that you purchase the stock, but rather an indication of why I purchased it, how it has performed, and what I plan to do with it.  

Name of Company and Description of Business

According to AT&T's website 

At AT&T, we’re bringing it all together. We deliver advanced mobile services, next-generation TV, high-speed internet and smart solutions for people and businesses. That’s why we’re investing to be a global leader in the Technology, Media and Telecommunications industry.

In the United States, we offer TV and wireless nationwide, plus a large high-speed internet footprint. We offer a wide choice of internet speeds to meet customers’ needs. With our 100% fiber network, customers in 67 markets can download a 90-minute HD movie in less than 36 seconds, a 30-minute TV episode in 3 seconds and 25 songs in 1 second¹. We plan to expand these speeds to at least 75 metros in total. We also offer pay TV in 11 Latin American countries.

We offer solutions that help businesses in every industry serve their customers better. We deliver advanced services to millions of businesses on 6 continents. That includes nearly all of the Fortune 1000 as well as neighborhood businesses across the United States.

Our high-speed mobile internet network covers more than 400 million people and businesses across the U.S. and Mexico. We also wirelessly connect cars, machines, shipping containers and more. It's all part of our leadership in what’s called the Internet of Things.

Speaking historically, AT&T is "the phone company" that got its start when Alexander Graham Bell invented the telephone.  It has gone through several rounds of break-ups and consolidations but today offers a variety of telecommunications products.

Date Purchased

I purchased two shares on November 21, 2016.

Purchase Price

My purchase price was $37.67.

Current Price

The current price, as of 12:49 CST, on 1/29/18 is $37.49.

Stop-Loss Price

I do not have a stop-loss set for this stock.  I don't think AT&T is going anywhere so I'm not afraid of losing a lot of money on this.  While the price may go up and down, the business itself is profitable and it is paying a good dividend.

Dividends Received

I received $.49 per share on May 1, August 1, November 1 and will receive a $0.50 dividend on February 1.

Gain or Loss Since Purchase:

My dividends plus the current cost of the stock total $38.47; I purchased the share for $37.67, giving me a current gain of $0.80 or 2.1%  over 14 months. By comparison, the S&P has risen about 35% since then.

What Others Think

Dividend Value Builder:  "T is a great addition to any large diversified portfolio. However, it should be viewed differently than in the past. I’m afraid the long term risk of a dividend cut is higher than most investors perceive."

The Money Madam at Seeking Alpha:  "AT&T is a good pick for 2018"

Stone Fox Capital at Seeking Alpha:  " Ultimately, the highly competitive domestic wireless market and cable television markets limit any material upside for the stock. Investors in AT&T will get to enjoy the large 5% dividend yield, but not much else."

Discount Fountain at Seeking Alpha:  "[M] view is that AT&T will continue to be a strong long-term investment going forward. The stock pays a very attractive yield, its core business remains strong, and the implications surrounding the ongoing Time Warner deal appear to be causing irrational avoidance of this stock, leading to quite a good buying opportunity."

Brian Bollinger (10/26/16): "However, my preference is to watch major transformations from the sideline for a while. AT&T has a lot of new businesses to digest and optimize between DirecTV and Time Warner. The media industry could certainly evolve the way AT&T is expecting (and in part trying to force with its deals), but there are plenty of other risks involved as well. Certainly no one can forget AOL’s disastrous merger with Time Warner.

For now, I prefer to stick with other high dividend stocks in our Conservative Retirees dividend stock portfolio. "

Jason Feiber (11/12/17):  "AT&T Inc. (T) is a high-quality business with a tremendous record for paying shareholders a huge and growing dividend. Their ability to continue doing that could very well improve moving forward, yet the stock’s recent price action apparently discounts much of this. But short-term volatility is often a long-term opportunity, and this stock has the potential for 14% upside on top of a market-crushing yield of almost 6%. If you like your dividends big, and you want them to get bigger every year, this dividend growth stock should be on your radar."

Why Did I Purchase?

I purchased AT&T stock because I was looking for a company that paid good dividends and that would be around for the long haul.

What Are My Plans?

I plan to maintain my position into the indefinite future, though if the price drops below $37.00 in the next few months, I may buy another share.

Additional Comments:

A couple of days after I wrote most of this article, AT&T released their fourth quarter earnings per share.  While the expected earnings per share were $0.65 per share, the actual earnings per share were $0.78, and as a result, share price rose $1.19 in after hours trading.