By Clinton Holmes
Seriously, when I first saw AT&T’s (NYSE:T) dividend yield was above 5%, I couldn’t believe it. AT&T is a long-standing proven company. Over the last two decades, AT&T has had multiple periods of explosive growth.
The first period of growth came between 1995 and 2005 when revenue and net income almost tripled due to the activation of AT&T’s mobile infrastructure.
The second period of growth came between 2005 and 2009 when revenue tripled and net income doubled thanks in large part to AT&T’s exclusive rights to Apple’s (NASDAQ:AAPL) iPhone.
With interest rates still in the gutter, it doesn’t make sense to me that investors haven’t driven the 5% dividend yield down by gobbling up shares of AT&T. As you can see, there has actually been a divergence between the dividend yield of AT&T and the SPDR Barclay TIPS ETF (NYSEARCA:IPE).