Want $1,000 in dividend income? Here’s how much you should invest in AT&T stock

AT&T (T 1.55%) is one of the most iconic actions ever. The history of the company stretches all the way back late the 1800smaking it one of the oldest publicly traded US companies.

In addition to its long history of existenceAT&T also paid a regular dividend for more than 30 years. It’s a decent one too. The company’s dividend is $1.11 per share annually, spread over four quarterly payments of $0.2775 per share.

That means thatas of this writing, AT&T stock has a forward dividend yield (annual dividend payment divided by stock price) of 5.39%.

In order to calculate how many shares of AT&T stock an investor would need to generate $1,000 in dividend income, simply divide 1,000 by the annual dividend.

So, for example, here is the formula with numbers from September 4:

At a recent price of $20.59 per share, an investment of approximately $18,550 should generate $1,000 in dividends over the course of a year.

Of course, it’s important to remember that several factors could change how much you earn it is in the end GENERATED.

First, AT&T, like all public companies, could change its dividend payments — either up or down. In fact, in 2022, AT&T cut its dividend payout after splitting off its WarnerMedia assets.

Second, as AT&T’s stock price changes, so does the stock’s forward dividend yield. Therefore, if AT&T’s stock price falls, an investor might buy fewer shares, but TO still generate $1,000 (or more) in dividend income.

Investors looking for income have to do your homework before buying dividend stocks. Remember: A company’s underlying financial health is just as important — if not more important — than the size of its expected dividend payout.