Ma Bell Lookin' Good
In case you missed it, AT&T raised the dividend from .355 to .40 per share per quarter and announced a $400 million share buyback today. On a day that saw the S&P tank by 2.5%, T was up over a buck and a half or 4% to 39.46 a share. Even with the nice bump today, the stock is yielding over 4% at the new dividend rate.
T's trading at a forward PE at 12.5 vs. about 16 for the S&P 500. To match the S&P's forward PE ratio, T would need to trade up to about $50 per share. I don't see any obvious reason why T should trade at a substantial discount to the market. Closing even half the gap would bring it to $45, a 12+% gain from today's close.
I consider this a buy up to about $40 per share. The safe and relatively high dividend yield limits downside risk and there's good potential for a 15% to 25% total return over the next 12 months.
Disclosure - I own shares of AT&T.
Comments: View Comments | Tuesday December 11, 2007 | Stocks: T,
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Archive Comments (4)
Check the little note in today's IBD about those eliminating
land line phones and going just cell. It is just a small blip but does say a lot.
Just think a the first phone you can remember ,gosh we have come a long way.
Now what do you thing a guy named DuffBeer would have had handed to him first a phone nah -- a beer of course.
Cheers DuffBeer
Posted by duffbeer December 12, 2007 9:53 AM
Cheers back at ya' Duff.
I'll look for the IBD note.
Seeking Alpha had a column this morning that talked a bit about T's future with land lines disappearing almost as fast as the cold beer in a can of Duff.
http://seekingalpha.com/article/57050-at-t-wake-me-up-at-65
In any event, the bigger T divvy should be good for a couple more Duffs each quarter.
Russ
Posted by Russell Krull December 12, 2007 11:44 AM
Rusty,
found that site because of this contest. It is almost as good as Duff finding a lost beer !!!!
I bumped into looking for another Alpha site (alphaking), I believe it is the wildman the nortorious Kevin King.
Russ you can reach me direct dfbigos@yahoo.com
I am off for a beer with an old friend fronm Nam. we are now just armed with bottles -- beer bottles that is !!!!!!
Cheers, DuffBeer
Posted by duffbeer December 12, 2007 12:59 PM
DuffBeer,
Being of Germanic persuasion, I was weaned on Kinder Bier ( aka Near Bier aka NA ( non-alcohol ) beer. The 1st telephone I used was a Porcelain Telephone - I spit up Duffer Beer like a sick whale Spits up AmberGris.
T is a GOOOD TRADE - i LIKE IT, A LITTLE BIT.
Rusty - nailed it,
don't listen to the duffer when he's in his cups - he gets so maudlin and slurs.
Don {Stagger} Lee Ferk
PS - I'm drinking SandShark's beer tonight - I kicked sand in his TEETH and Thunked him up aside o'da Haid with an empty Duffer Beer bottle. I was fishing w/o a licence or a fishing Pole ( whatever THAT is ).
Posted by Anonymous December 24, 2007 5:44 PM