James Hofmann added shares of AT&T Inc (NYSE: T) to his Dividend Plus model on December 28th. Hofmann’s model “invests in equities with a stable dividend and above average yield using a value-based philosophy.” T now has a dividend yield of 5.76% (per Google Finance, as of market close 1/4/11). Here’s the recent performance of Hofmann’s Dividend Plus model:
As you can see from the five-year chart below, T has fallen a long way from its 2007 highs and the slowness of its recovery may be due, in part, to its poor customer service reviews and service issues. But lately (as evidenced by the 6-month chart below) its stock price has begun to rise again. There are many potential reasons for this.
The first could be the result of its exclusive, five-year contract to provide service to Apple Inc (NASDAQ: AAPL) iPhone users, which was signed in 2007 but confirmed in May of this year. Other factors may include T’s purchase of wireless assets from Verizon Communications Inc (NYSE: VZ), its sale of the European subsidy of Wayport, Inc., and its sale of Sterling Commerce, which net it a pre-tax gain of about $800 million, according to Reuters.com.
In an effort to improve service and customer satisfaction, T recently announced the expansion of its Wi-Fi service, increased bandwidth from the purchase of spectrum licenses from Qualcomm Inc (NASDAQ: QCOM) and the expansion of its 4G service capacity.
*Charts courtesy of Yahoo Finance.
