Warren Buffett sold AT&T (T) out of Berkshire Hathaway’s
portfolio of high-yield dividend stocks during the first quarter of 2016.
Warren Buffett acquired his stake in AT&T during the
third quarter of 2015 as a result of AT&T’s acquisition of DirecTV.
Buffett had owned DirecTV prior to the acquisition (his
first purchase was in 2011), so his shares converted into AT&T stock once
the deal closed because the acquisition was a stock and cash transaction.
Despite AT&T’s high dividend yield near 5% and seemingly
cheap price-to-earnings multiple (14.2), Warren Buffett apparently thought
there were more attractive options to put his money to work.
Like Warren Buffett, we prefer Verizon (VZ), which is held
in Berkshire Hathaway’s portfolio as well as our Conservative Retirees dividend
portfolio.
Let’s take a closer look at the safety and growth potential
of AT&T’s dividend as well as the company’s overall appeal as a potential
investment opportunity for dividend investors.
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