Investing in dividend-paying stocks can be a sound strategy for investors seeking consistent income and stability in their portfolios. Telecommunication services provider AT&T (NYSE:T) is one such stock with an impressive dividend yield of 6.45%, much above the sector’s average of 2.5%. Furthermore, Wall Street analysts expect that T stock has the potential to grow by over 58% in the next 12 months.
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It is noteworthy that AT&T carries a “Perfect 10” Smart Score on TipRanks. Historically, stocks with the “Perfect 10” score have outperformed the S&P 500 Index (SPX) by a wide margin.
Let’s take a closer look at the stock.
Here’s What Makes AT&T Stock Worth Considering
The company’s efforts to strengthen free cash flow by reducing expenses by about $6 billion are encouraging. Furthermore, its commitment to continue improving the quality of the 5G network and expanding its fiber footprint bodes well for long-term growth.
It is worth highlighting that Wolfe Research analyst Peter Supino sees AT&T as a solid, long-term investment. The analyst noted that the company is bolstering its core business, improving efficiency, and lowering debt levels. Additionally, Supino highlighted that, despite intense competition, AT&T has been able to increase the number of net postpaid phone customers in the last reported quarter.
In a research note to investors on March 5, Supino upgraded the stock’s rating to Buy from Hold. Also, his price target of $21 implies an upside potential of 22.1% from the current levels.
At the same time, hedge funds are also optimistic about AT&T, as they bought 4.8 million shares of T stock in the last quarter. Overall, the stock has a Very Positive Hedge Fund Confidence Signal at present.
Is AT&T a Buy, Sell, or Hold?
Overall, Wall Street is cautiously optimistic about the stock. AT&T has a Moderate Buy consensus rating based on 10 Buys and five Holds. The analysts’ average price target of $27.25 implies an impressive 58.43% upside potential from current levels. Shares of the company have gained 21.8% over the past six months.
Concluding Thoughts
The company’s efforts to improve its performance through cost-cutting measures and expansion of its Fiber segment bodes well for the near-term growth. In addition, the company’s commitment to enhancing shareholders’ value makes it worth considering for income-seeking investors.
