AT&T Inc. (NYSE:T) provided an update to shareholders regarding the status of its capital allocation strategy.
AT&T’s board of directors approved a 2% increase in the company’s quarterly dividend. The dividend is payable on Feb. 3, 2020, to stockholders of record at the close of business on Jan. 10, 2020. AT&T’s quarterly dividend will increase from $0.51 per share to $0.52 per share. On an annualized basis, this equates to a full-year dividend of $2.08, up from $2.04. The increase is consistent with AT&T’s capital allocation strategy announced in October calling for continued modest annual increases in the dividend.
Other updates to the company’s capital allocation strategy include:
The company began retiring shares in the fourth quarter and has entered into a $4 billion accelerated share repurchase (ASR) agreement. Through purchases under the ASR, AT&T plans to retire about 100 million shares in the first quarter of 2020.
AT&T also remains on track to hit its 2019 net debt-to-adjusted EBITDA ratio target in the 2.5x range. It expects a leverage ratio of between 2.0x to 2.25x by the end of 2022.
The company has supported its deleveraging goals with an asset monetization program that is well ahead of target. At the beginning of 2019, AT&T said it planned to monetize $6 billion to $8 billion from non-core assets. With the completion of the recent $4.5 billion sale of a preferred equity interest in a subsidiary that holds cell tower assets, AT&T now has completed a net $15 billion in asset monetization initiatives this year.
It has also announced nearly $4 billion in monetization initiatives that are expected to close by mid-2020.
AT&T’s board of directors also declared a dividend of $170.1388889 per share on the company’s 5.000% Perpetual Preferred Stock, Series A (representing $0.1701388889 per Depositary Share, each representing a 1/1000th interest in the 5.000% Perpetual Preferred Stock, Series A). The dividend is payable on February 3, 2020, to stockholders of record at the close of business on January 17, 2020. The dividend is prorated to cover the time period from initial settlement on December 12, 2019, to the dividend payment date.