We recently came out with an intriguing list of 13 Best Cheap Dividend Stocks To Buy Right Now. If you’re thinking about where AT&T Inc. (NYSE:T) stacks up with the other champs of cheap dividend stocks, keep reading. Before you dive into this, you might want to check out the 10 Companies that Just Raised their Dividends, too.
Now, here in the Big Apple, we’re no strangers to the savvy of value investing, right? It’s famously been championed by folks like Warren Buffett. This is a strategy where investors look to snag stocks they think are seriously undervalued. Talk about getting those diamonds in the rough!
Is AT&T Inc. (T) the Best Cheap Dividend Stock to Buy Now?
- Number of Hedge Fund Holders: 80
- Forward P/E Ratio: 12.94
AT&T isn’t just any telecommunications powerhouse; this American multinational giant’s been through the wringer and is dancing back on the stage. It’s pulled the plug on its pay-TV gig to focus on better bets. By spinning off DirecTV, it’s zoning in on wireless action and fiber connectivity—a smart pivot if you ask me.
To sweeten the deal, AT&T has been banking some serious cash. In the last quarter alone, they pulled in $11.9 billion from operations. They’ve got $4.8 billion just sitting there free as a bird. You know what that means? Secure dividends! Their current quarterly dividend stands at $0.2775 per share with a 2.15% yield.
Even though some folks are head over heels for these tech titans, don’t count value out just yet. Did you know in the third quarter the Russell Value Index skyrocketed by 9.4%? Compare that to the piddly 3.2% rise in the Russell Growth Index!
A report by BlackRock showcased the main forces behind this trend. Robust job numbers, chilling inflation, and the Fed’s interest rate dance have seen investors scurrying to grab more than just mega-cap stocks. Industries like financials and utilities are milking the benefits of lower rates, too.
Tables and Trends
| Russell Index | Value Index Rise | Growth Index Rise |
|---|---|---|
| Q3 2024 | 9.4% | 3.2% |
Adding to the analysis, JP Morgan suggests it’s risky to lean into just one strategy. They point out that major tech outfits have their fingers in many pies. So, while it can seem like riding high on tech is the way, diversifying might just be the juicy ticket to success.
Unlike growth stocks, value ones like dividend payers drip with stability. According to S&P Dow Jones Indices, focusing on income-generating strategies is akin to eagle-eyed value investing. Companies with sweet dividends and lower price tags draw investors like bees to honey.
It’s worth noting, though, that the Dividend Aristocrats Index tells a story of balanced stock picks. Looking back over 1999-2022, this index found a harmonious blend of both growth (40.94%) and value stocks (59.04%).
Our recipe for finding these hidden gems was simple. We used a Finviz screener to scope out dividend companies with forward P/E ratios below 15 as of early March. Through this, we uncovered the lucky 13 stocks that attracted the most hedge fund love by the end of 2023.
Our hunt for hedge fund favorites is no accident. Research shows that mimicking top stock choices from stellar hedge funds can help crush the market averages. Our newsletter’s strategy has returned 373.4% since 2014, more than doubling the performance of its benchmark.
So, whether you’re betting on AT&T (Seventh in our ranking, by the way) for some dividends or eyeing shiny AI prospects for quicker returns, there’s undoubtedly a flavor for every palate. Now, as they say in our bustling city, time to seize the day.
next up: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.
Disclosure: None. This article originally appeared on Insider Monkey.
