AT&T Inc. said Friday it boosted its dividend by 2.2%, a
move expected to cost the telecom giant an extra $51.9 million a
quarter.
AT&T will now pay out 47 cents a share per quarter, up from
46 cents a share. The increase brings the company's dividend yield
to 5.6%. Verizon Communications Inc., meanwhile, has a dividend
yield of about 4.7%.
AT&T's dividend is crucial to drawing investors to the
slow-growing company, but comes at a high cost. Last year, the
dividend cost the company more than $9 billion.
Dividend yields for both AT&T and Verizon have also been on
the rise in recent weeks as the companies' shares have fallen
because of mounting spending in a government auction for wireless
airwaves and further signs that competition is taking a toll.
AT&T in October lowered its revenue outlook for the year,
pointing to fewer-than-expected sign-ups for its no-contract Next
wireless plans that require customers to pay full price for their
smartphones. The company has been aggressive in pushing the sale of
smartphones at full price. As part of getting people to pay for
their device, AT&T has generally lowered the monthly service
fee for customers not in a contract.
Write to Chelsey Dulaney at chelsey.dulaney@wsj.com
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