Dividend stocks can be great sources of recurring cash flow for investors, especially those which increase their payouts over time. Whether it’s to help offset the effects of inflation or to simply give people an added incentive to hang on for the long haul, dividend growth stocks make for attractive investments.
Last week, telecom company T-Mobile US (NASDAQ:TMUS) announced it would be increasing its dividend. And it wasn’t just a modest increase. The company has announced a quarterly cash dividend of $1.02 for its upcoming December payout. That’s an increase of 14 cents, or 16%, from its most recent dividend.
It’s a sizeable increase and it means that on annual basis, people who invest in T-Mobile will collect $4.08 per share, over the course of a full year. Based on its share price of around $240, that puts the stock’s dividend yield at around 1.7%, which is higher than the S&P 500 average of 1.2%.
The company only started paying dividends back in 2023 but it has announced multiple increases since then. It’s a good sign of its commitment to growing the dividend. Telecom stocks are often seen as relatively safe dividend stocks due to the high predictability in their earnings and overall stability.
T-Mobile has generated $84 billion in revenue over its past four quarters, and its profit has totaled more than $12 billion. The stock trades at 23 times its trailing earnings and in the past 12 months it has risen by around 20%. For long-term investors, this can be an excellent stock to buy and hold.
