AT&T Inc. Boosts Dividend 2.2%

   By Chelsey Dulaney 
 

AT&T Inc. said Friday it boosted its dividend by 2.2%, a move expected to cost the telecom giant an extra $51.9 million a quarter.

AT&T will now pay out 47 cents a share per quarter, up from 46 cents a share. The increase brings the company's dividend yield to 5.6%. Verizon Communications Inc., meanwhile, has a dividend yield of about 4.7%.

AT&T's dividend is crucial to drawing investors to the slow-growing company, but comes at a high cost. Last year, the dividend cost the company more than $9 billion.

Dividend yields for both AT&T and Verizon have also been on the rise in recent weeks as the companies' shares have fallen because of mounting spending in a government auction for wireless airwaves and further signs that competition is taking a toll.

AT&T in October lowered its revenue outlook for the year, pointing to fewer-than-expected sign-ups for its no-contract Next wireless plans that require customers to pay full price for their smartphones. The company has been aggressive in pushing the sale of smartphones at full price. As part of getting people to pay for their device, AT&T has generally lowered the monthly service fee for customers not in a contract.

Write to Chelsey Dulaney at [e-mail]

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