A Blue Chip Powerhouse

If you’re looking for a solid stock that offers dividends and the prospect of growth, consider the country’s largest telecommunications company, AT&T (NYSE: T). Because its main business produces a reliable stream of income, the company’s earnings (and its stock price) tend to be significantly less volatile than average. AT&T has a stellar track record of returning value to shareholders, has a sturdy business with significant growth opportunities ahead, and has recently been appealingly priced.

Despite challenges from lowerpriced competitors, premium wireless phone service is a proven draw, and AT&T’s advantage over budgetpriced offerings will probably become more pronounced when 5G mobile technology rolls out and spreads. AT&T is also in position to be a leading service provider for connected cars and other Internet of Things applications, and its pending acquisition of Time Warner should turn it into a content powerhouse — opening up a range of bundling opportunities.

AT&T’s dividend payout recently yielded 5.8 percent, and with its ample free cash flow, the company is poised to continue increasing its payout regularly. Indeed, its dividend history features 33 years of annual increases that it’s surely keen to maintain.

With a hefty dividend, a relatively low price-to-earnings (P/E) ratio and a leadership position in the wireless world, AT&T stands out as a promising choice for long-term investors. (The Motley Fool has recommended Time Warner.)