AT&T (NYSE: T) stock price has been rallying steadily since the start of this year. The stock price of the Communication Company had experienced steep selloff in the past two years. Its shares are currently trading at the highest level since the beginning of 2018.
Fortunately, its shares bounced back this year. This is because of investors’ confidence in its 5G plan and strong dividend yield. AT&T stock price is currently hovering around $37 with a dividend yield of 5.4%.
5G Plan is Supporting AT&T Stock Price
AT&T is planning to start stand-alone deployments of 5G in the first half of the next year. This means the company is unlikely to use 4G LTE for any control functions. The deployment of 5G would enhance its wireless network leadership in speed, network performance, and reliability.
The 5G deployment is in line with its recently announced strategy that is developed to benefit from two market trends.
These two trends include increases in demand for connectivity and bandwidth and continuous growth in time spent viewing premium content. The company claims they have the right assets to take advantage of these trends.
Cash Returns are Enhancing Confidence
Despite headwinds, AT&T has sustained its dividend growth in the last two years. It has increased quarterly dividends in the past 35 consecutive years.
The company currently offers a quarterly dividend of $0.51 per share. Its financial numbers are offering a complete cover to dividend payments. In addition, the company is also seeking to work on a share repurchase program.
AT&T chairman and CEO said, “We continue to pay down debt and are more confident than ever that we’ll meet our yearend deleveraging goal, and we’ll take a look at buying back stock.
The company expects to generate $28 billion in free cash flows this year – which is more than enough to cover dividend payments of $14 billion. Overall, several catalysts are supporting AT&T stock price upside momentum.