4 Reasons AT&T Is Still a Great Buy in 2017

n 2016, telecom giant AT&T Inc. (T) beat the market by delivering gains of more than 20% for its shareholders. However, the ride is far from over for AT&T stock and the firm makes for a worthwhile pick for income investors.
T stock has seen very little movement so far in 2017 as investors suss out whether the company will be allowed to go through with its Time Warner Inc. (TWX) acquisition under the Trump administration. Whether you believe the merger will happen, AT&T stock boasts solid financials and a great dividend, making it a good addition to a long-term portfolio.
Income You Can Count On
One of the big reasons to buy and hold AT&T stock is the company’s 4.66% dividend yield. Not only is this one of the highest yields in the industry, but it’s unlikely to disappear anytime soon. T stock has a robust business with plenty of free cash flow, not to mention the fact that the company has been increasing its dividend for the last 33 years. For those reasons, investors can be pretty confident that AT&T stock will provide a steady stream of passive income for years to come.
A Solid Performer
It’s no secret that telecoms are caught in the middle of a difficult transition period as streaming gains momentum and legal and ethical questions about how the internet should be governed arise. However, AT&T has proven that it is able to change with the times by introducing a streaming service and laying the groundwork to create a faster 5G network that supports the public’s reliance on mobile browsing.
Trump Effect
While President Trump may negatively affect AT&T stock by blocking the TWX merger, the Commander in Chief could give the company a boost in the coming year as well. Trump’s tax reform plans will probably take the corporate tax rate down to 20% or lower from its current 35% rate. This will benefit T stock specifically because unlike many of its peers, AT&T pays a tax rate of around 34%.
Merger Enthusiasm
Some of the reason for T’s gains in 2016 was the excitement surrounding the proposed merger between AT&T and Time Warner. The two telecom heavyweights would create a pretty powerful combination that would likely increase shareholder value. However, many are worried that the Trump administration will block the deal from going through, which has taken some of the shine off of T stock.
AT&T stock has a lot going for it. Not only could investors be gearing up for a potential merge with TWX, but the firm’s solid performance and impressive dividend payment are enough all on their own to make T stock a good long-term buy.