With the stability of a dividend yield of 7.2%, AT&T currently has a very good risk/return ratio
AT&T has distributed more than $40 billion in dividends to its shareholders in the last three years
If the price jumps above $29, the next target could be $30 or even $35
AT&T (NYSE: T) stocks have been on an upward trend for the past two weeks, and so far there is no sign of a trend reversal. Pharmaceutical company Pfizer has announced that it may have a coronavirus vaccine ready in the United States by the end of this year, further supporting AT&T shares.
Fundamental analysis: The current dividend makes AT&T one of the more stable players in the region
AT&T Inc. is handling the coronavirus threat very well and is drawing investors’ attention to this uncertainty in the financial markets. The company’s recent earnings and overall budget remain well above expectations and AT&T has ample room to continue offering dividend increases.
Analysts expect EPS growth of approximately $3.75 in 2020 and are approaching $4.50 by 2022. AT&T’s stock has risen from $26.3 to $29 in less than a few days and the current price is around $28.7.
The U.S. stock market is supported by optimism about the prospect of a split Congress, news about the COVID-19 vaccine, and a lower risk of major policy changes.
Joe Biden won the presidential election in his native Pennsylvania last Saturday and became the 46th President of the United States. President of the United States. Pfizer and BioNTech announced that their jointly developed COVID-19 vaccine is effective in more than 90% of patients.
John Stephens, Chief Financial Officer, recently stated that he is convinced of AT&T’s ability to generate strong cash flows in the coming period. AT&T has reduced net debt by approximately $30 billion since the first quarter and the company continues to invest in its key areas of focus (broadband connectivity over fiber/5G, software-based entertainment through HBO Max and AT&T TV).
AT&T has maintained its dividend payments over several decades and this share could be a very good investment option. With the stability of a dividend yield of 7.2%, AT&T currently has a very good risk/reward ratio and investors in this stock can gain much more by taking a comparatively lower risk.
On the other hand, the financial markets are still dominated by concerns about sluggish economic growth in the midst of the ongoing pandemic. The US reported over 130,000 new cases in one day, and the pandemic brought US hospitals to the brink of capacity.
There are some risks in buying AT&T shares, but the current dividend makes AT&T one of the more stable players in the region.
Technical analysis: Bulls focus on breaking the $29 resistance level
Data source: tradingview.com
If we take a look at the chart above (one year period), we see that the price of this stock has weakened from $39.5 to $26.02. On this chart I have highlighted important resistance and support levels.
The important support levels are $27 and $26, $29 and $30 represent the resistance levels. If the price jumps above the $29 mark, it would be a “buy” signal and we have the open path to $30.
A rise above the $30 mark supports the continuation of the upward trend, and the next price target could be around $35. If the price falls in the coming period, any price in the $20-25 range could be a very good opportunity to invest in AT&T stock.
AT&T’s dividend is secure and the company is handling the coronavirus threat very well. AT&T has paid more than $40 billion in dividends to its shareholders in the last three years, and this figure may be even higher in the future. If we compare the total equity of 193.45 billion dollars and the market capitalization of 205 billion dollars, we can see that this stock is not overvalued and that now might be a good time to buy this stock. AT&T currently has a very good risk/reward ratio and investors in this stock can gain much more by taking a comparatively lower risk. If the share price falls in the coming period, any price in a range of 20 to 25 dollars could be a very good opportunity to invest in AT&T shares.