Key Insights
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Lower interest rates are expected to attract investors back to dividend-paying stocks.
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AT&T’s growth in its 5G and fiber sectors will support its substantial dividend payouts.
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Vici Properties boasts high occupancy rates and stable leases, positioning it as a leading REIT.
- Discover 10 stocks we prefer over AT&T ›
In recent years, rising interest rates pushed income investors away from dividend stocks in favor of safer options like CDs and T-bills. However, as interest rates begin to drop, many are likely to return to preferred blue-chip dividend stocks.
Investors should avoid simply pursuing high yields, which may be temporary or exaggerated by falling stock prices. Instead, it’s wise to focus on companies with strong market positions, steady earnings, and reasonable dividend payout ratios. Here, we examine two dividend stocks that meet these criteria: AT&T (NYSE: T) and Vici Properties (NYSE: VICI).
1. AT&T
In recent years, AT&T shifted its focus from media expansion by divesting DirecTV and Time Warner, which allowed it to streamline operations and allocate resources towards its growing 5G and fiber sectors, while also reducing debt.
AT&T’s postpaid mobile segment, a key growth driver, gained 1.7 million subscribers in 2023 and 2024, with an additional 725,000 in early 2025. Its fiber segment added 1.1 million connections in 2023 and 1 million in 2024. This healthy expansion counterbalances declines in its wireline business.
The company’s free cash flow (FCF) was $16.8 billion in 2023 and is projected to be around $17.6 billion in 2024, although it may dip to the mid-$16 billion range in 2025 due to increased investments and tax burdens. Nonetheless, this FCF comfortably covers its annual dividend obligations, which were $8.1 billion in 2023 and $8.2 billion in 2024. With a forward dividend yield of 4.3%, AT&T offers a competitive return compared to the current 4% yield from 10-Year Treasuries.
2. Vici Properties
Vici is a real estate investment trust (REIT) focused on experiential properties, owning 93 casinos and resorts across the U.S. and Canada. Vici’s business model involves purchasing properties and leasing them, with a commitment to distributing at least 90% of pre-tax profits as dividends for tax advantages.
Key tenants include major operators like Caesars Entertainment, MGM Resorts International, and Penn Entertainment. While these companies face economic challenges, Vici secures long-term leases indexed to the Consumer Price Index, which helps them keep pace with inflation. Vici has maintained an impressive 100% occupancy rate since its IPO in 2018.
For 2025, Vici anticipates its adjusted funds from operations (AFFO) per share to increase by 4%-6%, reaching $2.35-$2.37, comfortably supporting its dividend rate of $1.73 per share. With a forward yield of 5.8% and a valuation of about 13 times this year’s AFFO, Vici appears to remain a solid investment opportunity as interest rates decline and economic conditions stabilize.
Should you invest $1,000 in AT&T now?
Before deciding to invest in AT&T, it’s worth noting that the Motley Fool Stock Advisor team has identified their top 10 stock picks, none of which include AT&T. Historically, these selections have yielded exceptional returns.
