Stay in the Trade as AT&T Provides Prime 5G Exposure
It’s earnings season, everybody. Are you ready to rumble? Among the most highly anticipated earnings releases will come from Texas-headquartered telecommunications giant AT&T (NYSE:T), as T stock is on the comeback trail and could continue its upward momentum.
AT&T’s fourth-quarter 2021 earnings release is scheduled to take place on Jan. 26 before the stock market opens. Since AT&T is included in some exchange-traded and mutual funds, this earnings report is a significant event, so mark your calendars and place your bets.
Alternatively, you can choose not to obsess over the earnings-data release. AT&T is one of those mega-companies that you can invest in with a “set it and forget it” strategy, regardless of the short-term data points.
Besides, if you hold your shares long enough, you can collect and re-invest some juicy dividend payments. Plus, you’ll have the confidence that comes with investing in an established business that continues to introduce cutting-edge technology.
A Closer Look at T Stock
After topping out in May of last year at $33.88, T stock started on a long, painful decline. Twice in December, the stock slid to the $22 area.
That turned out to be a terrific buying opportunity, though of course it’s easy to see that in hindsight. When you’re in the midst of a prolonged stock decline, it’s psychologically difficult to take a long position.
Yet, that’s exactly what contrarians do, and it can be a profitable strategy. In the case of T stock, the bounce off of $22 was impressive as the share price reached $27 by mid-January 2022.
Could this be the start of a long-term comeback? It’s entirely possible – and while you’re holding and waiting, you can collect AT&T’s generous dividend payouts.
Not long ago, AT&T’s board of directors declared a quarterly dividend of 52 cents per share. Currently, the company offers a forward annual dividend yield of 7.65% – not too shabby, you must admit.
Tech on Track
While AT&T is an old company and a reliable dividend payer, let’s not pigeonhole the company as unadventurous.
In reality, AT&T is among the most tech-forward businesses in the U.S. In a recent shareholder update, CEO John Stankey reminded AT&T’s investors that the company is rapidly advancing its technology products and services, especially in the 5G and fiber segments.
Moreover, Stankey assured that AT&T’s 5G deployment plans are on track. Additionally, the CEO stated that the company remains comfortable with its fiber build plan.
Going forward, Stankey expects multiple opportunities from the nation’s largest fiber network. These opportunities are to include improved consumer and business penetration, and the ability to simultaneously support a robust 5G network.
It appears that Stankey’s vision is already playing out in early 2022, as AT&T revealed that it will soon deploy its C-Band spectrum as part of the company’s 5G+ technology offerings.
5G in Focus
Without a doubt, the build-out of AT&T’s 5G network infrastructure will be crucial to the company’s continued viability as a business enterprise.
AT&T’s 5G+ service is currently available in parts of 44 cities and various locations throughout the U.S. Using the C-Band 5G spectrum, AT&T expects to cover 70 million to 75 million people by the end of 2022, and is targeting coverage of up to 200 million people in 2023.
Furthermore, AT&T was the biggest spender in a recent Federal Communications Commission (FCC) auction for 5G wireless spectrum technology.
Astoundingly, AT&T will spend $9.1 billion on the 3.45 GHz spectrum the company won at the FCC auction. Clearly, AT&T is prepared to dominate the 5G industry in 2022 and beyond.
The Bottom Line
What do you like the most about T stock? Is it the generous dividend yield? Or, is it the exposure to top-of-the-line 5G and fiber technology?
Maybe, you just like the stock because it’s trading at a low price point, and has just started to rebound.
Actually, the best reason to bet on AT&T now is “all of the above.” It’s proof positive that an old company can create new technology, while rewarding its loyal shareholders year after year.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
