How Safe Are AT&T Stock and Its Dividend?

A streak of annual payout hikes has helped to make AT&T (NYSE: T) a high-yield dividend stock. Moreover, the excitement of 5G contributed to a 37.1% rise in the stock price during 2019.

However, shares have fallen so far in 2020. Competition and massive capital spending have worried investors. This may leave investors wondering if AT&T stock can soon return to growth, adding share-price appreciation to the returns it gives investors in the form of lucrative dividends?

AT&T's dividend may look solid at first glance. The company's long history of phone and internet services has given the company a dividend that has increased every year for the last 35 years. The $2.08 per share annual payout in dividends yields 5.5%. Moreover, assuming the merger of T-Mobile (NASDAQ: TMUS) and Sprint (NYSE: S) occurs, it will make AT&T just one of three companies that will offer nationwide 5G service in the United States. Due to the massive cost of the 5G buildouts, neither Verizon (NYSE: VZ) nor T-Mobile will likely have the appetite for the price wars of the 3G and 4G eras.

Source Fool.com