December 17, 2010, 3:27 PM — Its wireless network may not be the most reliable, at least based on Consumer Reports surveys, but shareholders apparently can always count on a dividend hike from AT&T.
The largest phone company in the U.S. on Friday said it will raise its quarterly dividend to 43 cents from 42 cents, an increase of 2.4 percent. On an annualized basis, the dividend goes to $1.72 from $1.68.
It's the 27th consecutive year that AT&T has increased its dividend to shareholders, according to Bloomberg.
The phone giant also announced that its board of directors has approved a repurchase authorization for 300 million shares, representing about 5 percent of outstanding shares. Based on Thursday's closing price of 26.25, the buyback will cost the company $7.88 billion.
AT&T has 46 million shares outstanding. The company currently is worth $1.2 billion.
Randall Stephenson, chairman and CEO of AT&T, said in an official statement, “This dividend increase, combined with the repurchase authorization, reflects the board’s confidence in our ability to generate strong cash flows. We have continued to invest to deliver the connectivity that is vital to the lives and business of our customers, and I’m proud that, at the same time, sound financial management has enabled us to lead the industry in returning cash to stockholders, even while reducing debt.”
The dividend will be payable next Feb. 1 to common stockholders of record as of Jan. 7, 2011.
Shares of AT&T (NYSE: ATT) were down Friday by 18 cents, or 0.7 percent, to 26.07.
Chris Nerney writes about the business side of technology market strategies and trends, legal issues, leadership changes, mergers, venture capital, IPOs and technology stocks. Follow him on Twitter @ChrisNerney.