AT&T Keeps Its Dividend Flat at a 5.76% Yield, So Investors are Shorting Puts for More Income

AT&T (T) said on March 31 its quarterly dividend would stay flat t 27.75 cents as it has been in the past 4 quarters ($1.11 annually). We wrote about this on Feb. 13 in our article, “As AT&T May Not Hike Its Dividend, Covered Calls are Becoming Popular.” As a result, investors are turning to selling short out-of-the-money (OTM) puts to create higher income and also potentially lowering their buy-in costs.

At today's price of $19.25, T stock has a very attractive dividend yield of 5.76%. That could be one reason why management at AT&T decided to not raise the dividend after 4 quarters at the same level since the spin-off of Warner Bros. Discovery (WBD) last year and when it cut the dividend.