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What’s AT&T’s Expected Dividend Growth?

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AT&T’s expected DPS

AT&T (T), the second-largest wireless carrier in the US, has a long history of returning cash to shareholders. The company reported a DPS (dividend per share) of $2.01 in 2018 compared to $1.97 in 2017. Analysts expect AT&T’s DPS to rise ~2.0% YoY (year-over-year) to $2.05 in 2019, ~2.0% YoY to $2.09 in 2020, and ~1.4% YoY to $2.12 in 2021.

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AT&T’s dividend yield

AT&T remains committed to paying higher dividends despite its high debt levels. In the first quarter, the mobile operator returned $3.7 billion to its shareholders in the form of dividends. It declared a quarterly dividend of $0.51 per share in the same period, which represented an increase of ~2.0% on a YoY basis. AT&T’s quarterly dividend was equivalent to an annualized dividend of $2.04 per share and a dividend yield of ~6.3% on June 12.

In the first quarter, AT&T’s free cash flow rose ~107.5% YoY to $5.9 billion, which supported its generous dividend payout. Its cash flow from operations increased by ~23.5% YoY to $11.1 billion in the first quarter. Its total capex was $5.2 billion in the first quarter compared to $6.1 billion in the first quarter of 2018.

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