December 20, 2011

My Investments in AT&T and Verizon

I own shares of AT&T (T) and Verizon (VZ) in my Roth IRA account.    I bought them because they are solid blue chip companies, they had relatively low PE and relatively high dividend yields.   I figured that both companies have decent income from a wide and stable business base. 

First the AT&T:

I bought 56 shares for $29.41 in November 2008 for a total cost of $1646.96.   Since then I've gotten $282.24 in dividends.   Currently AT&T trades at $29.01 so my 56 shares are worth $1624.56.     I'm up $259.84 total in just over 3 years.   Thats annual growth of just about 5% per year.  

Now the Verizon :

I bought my Verizon shares in January 2010.   I paid $1374.11 to get 44 shares at $31.23 each.     Today Verizon is worth $38.35.   Verizon has paid out $149.60 in dividends.    In July 2010 I got 10 shares of Frontier Communications as part of Verizon selling off some of their business to Frontier.  Frontier trades at $5.13 so my shares are worth $51.30.  I've also gotten $13.43 in dividends from them.  

My initial $1,374.11 is now worth $1,901.73 total.   Thats a 38% increase in just under two years.  This equates to about 17% annual growth.

Versus Benchmark

In about 3 years my AT&T shares have grown around 5% per year average.   In that same period the S&P 500 went from 970 to 1236.   That equates to around 8.4% annual growth.  My AT&T investment has underperformed the S&P 500 by a ways.

On the other hand my Verizon investment has grown 17% annually for the 2 years that I've owned it.  The S&P 500 went from 1150 to 1236 in that period and so only grew about 3.6% annually over the two years.

My AT&T investment did worse than the S&P 500 but my Verizon did better.   Combined I'm beating the index.  Between my AT&T and Verizon I'm up about 25% total.   If I'd instead bought the S&P 500 I'd be up about 18% now.


Today the PE for AT&T is at 14.7 and the dividend yield is 5.9%.   Verizon is PE of 15.4 and dividend yield of 5.2%.   They aren't any more or less attractive from when I bought them.   I am going to continue to hold for now.
--

1 comment:

  1. Interesting post. I am currently trying to decide on one over the other. I may just buy both to diversity.

    ReplyDelete

I'm starting to get too many spam messages in the comments so I'm turning on moderation. Please be patient and wait for your comment to be approved. Note it may take up to a few days for approval, thanks.

Blog Widget by LinkWithin