In a recent controversial column, we discussed the changing debt load of AT&T (NYSE:T) across five charts, and provided some projections. While our Seeking Alpha readers digested the widening debt burden picture that we painted for them, a very healthy discussion was generated. One of the outstanding questions was the safety of the dividend. We responded to inquiries and said the dividend was more than safe, and that we would follow up with a piece explaining why. With the recent Q3 dividend announcement, now is an opportune time. It is our thesis that the quarterly dividend will continue to be raised each year by a penny, but more importantly, it is our thesis that the dividend growth is more than safe. We will show that despite concerning headline numbers, all measures of dividend sustainability that we look at indicate the health of the dividend remains strong.
AT&T has always been a stock that we recommended buying on dips and holding long-term in a tax favored account to reinvest dividends and build wealth. In this piece, we demonstrated the power of the dividend and its ability to build wealth over time. That said, in the past few years, AT&T shifted from a stock that traded sideways to one that offered some…………………READ FULL COLUMN