This week’s Alpha Algorithm generated yet another familiar blue-chip recommendation. So far in 2016, dividend-paying blue chips have strongly outperformed the broader U.S. stock market and the choice of AT&T, Inc. (T) reflects that trend.
Founded in 1983 and based in Dallas, Texas, AT&T Inc. provides telecommunications and digital entertainment services through four segments: Business Solutions, Entertainment Group, Consumer Mobility and International. The company was formerly known as SBC Communications Inc. and changed its name to AT&T Inc. in November 2005.
AT&T versus the S&P 500 Year to Date
Seven Top Investment Strategies Betting on AT&T, Inc. (T)
- High Quality Stock
The stock exhibits positive fundamentals, including high return on equity, stable year-over-year earnings growth and low financial leverage.
- Fundamental Strength
A top U.S. stock based on fundamentals measured by book value, cash flow and sales dividends.
- Dividend Aristocrat
The stock is among those in the S&P 500 that have increased dividends for at least 25 consecutive years.
- Dividend Dog
One of the five highest-yielding stocks among each of the 10 sectors tracked in the S&P 500.
- High and Steady Dividend
The stock is one of 50 dividend-paying companies from the S&P 1,500 Composite Index that has increased dividends for at least 20 consecutive years.
- Small-Cap/Value Tilt
Selected using a multi-factor modeling approach, the stock is a smaller-cap or value stock designed to enhance portfolio risk/return characteristics.
- Large-Cap Growth and Value
Using a proprietary ranking based on separate models for growth and value, this is a large-cap stock that is part of an index that has historically outperformed its market-cap weighted benchmark.
Buy AT&T, Inc. (T) at market today. Place your initial stop at $34.00.
Since I tend to only recommend options when the stock has pulled back in the midst of an uptrend, I am (yet again) holding off on recommending options this week.
You were stopped out of long-time holding Constellation Brands Inc. (STZ) on May 31 at $152.75 for a 10.41% gain.
STZ July $140 calls first traded at $14.90 after the stop for a 69.90% gain. You gained an average of 83.52% on this position. Remember, whenever a stock stops out, sell any related options as soon as possible.
Nicholas A. Vardy