How to Buy AT&T (T) Stock

Invest in AT&T stock today with Interactive Brokers as your trusted online brokerage.

With its long-standing reputation as a leading telecommunications giant, AT&T offers more than just a chance to ride the waves of its stock performance; it also represents a unique opportunity to be part of a dynamic industry.

Whether you’re a seasoned investor looking to diversify your portfolio or a newcomer curious about the ins and outs of stock trading, understanding how to buy AT&T stock is a crucial step. This guide will walk you through the process.

Leveraging a market capitalization of $141.47 billion, AT&T is a stalwart in the telecom space. For the longest time, it rivaled Verizon Communications (NYSE: VZ), with the two butting heads for subscribers. But with the merger between T-Mobile (NASDAQ: TMUS) and Sprint, a viable 3-way race is now a reality in the wireless market.

Even if you’re just learning how to buy stocks, AT&T has a little something for everyone.

Step 1: Pick a Brokerage

Before you can pick up shares of T stock and start collecting that sweet dividend, you must first choose a brokerage. Thanks to the many innovations and conveniences of modern investment technologies — in particular, mobile trading apps — competition between brokers tightened considerably.

Today, most of the incentives that draw people into their platforms are identical, such as commission-free trading. Therefore, your decision mostly focuses on lifestyle and investing growth ambitions.

For example, if you work a hectic schedule and have limited time to monitor the ebb and flow of your investments, you should research the many trading apps at your disposal. Conversely, if you want to dive deeper into advanced trading tactics, you should consider a full-spectrum service.

Below is a list of best brokers for your consideration.

Step 2: Decide How Many Shares You Want

While seemingly a simple step, deciding your share count is an important one to make. Mainly, this will boil down to risk tolerance, investment goal and size of your account. For younger investors with time on their hands, you can afford to dial up your risk exposure. On the other end, those closer to retirement may not want to play too many games with speculative ventures.

With T stock yielding nearly 7%, it attracts passive income seekers. But the size and relevance of the company make it a reasonable choice as a safety net for any investor.

No matter what your magic number, be sure to have it written down before you make the transaction. At the point of the deal, you don’t want immediate market emotions to distract you from your carefully planned strategy.

Step 3: Choose Your Order Type

Because of the constant fluctuations in the market, you need to choose an order type that accounts for this variance in the manner that you want. Below is a brief rundown of key concepts to understand.

• Bid: The bid is the highest price a buyer will offer for a stock. It is always lower than the ask.
• Ask: In contrast, the ask is the lowest price that a seller will accept. It is always higher than the bid.
• Spread: The spread is the difference between the bid and ask price. Primarily, the bid-ask spread represents profitability for the market maker, who takes risks acquiring shares for the eventual distribution to investors. The spread also indicates liquidity. Blue-chip stocks like AT&T are very liquid and therefore have a narrow bid-ask spread (low risk). On the other hand, penny stocks are illiquid and have wide spreads (high risk).
• Limit order: To place an order at an exact price, choose a limit order, which will only execute at your predetermined rate. But keep in mind that no guarantee exists that your target stock will reach said price, which could leave your limit order hanging unfulfilled.
• Market order: You might want to have a guarantee that your order placed during normal session hours will execute. In this case, choose a market order, which will fulfill at the next available price. Be aware that this means the fulfillment terms will be least favorable to you — buy orders on the ask, sells on the bid.
• Stop-loss order: A protective order that automatically cuts your losses, a stop-loss order executes when your target stock drops to either a predetermined price or the next available price. The biggest risk with stop losses is the gap-down session, where a new session opens at a much lower price than the previous day’s close.
• Stop-limit order: To prevent the possibly steeper-than-expected loss associated with stop-loss orders, you may elect a stop-limit order. This order type only executes at a predetermined price. However, if after a gap-down session your target stock never reaches that price, you could leave your stop limit hanging painfully unfulfilled.

Step 4: Execute Your Trade

To execute your trade, follow these steps for a market order:

• Select action type (buy or sell).
• Enter the shares you want to acquire (or sell).
• Hit the buy (or sell) button.

To place a limit order, follow the same steps above, with the exception that you must enter your desired execution price.

Since the 1980s, AT&T helped guide shareholders through rough waters, including the Black Monday crash of 1987, the recession in the early 1990s and the technology boom-bust cycle. While T stock didn’t escape every negative incident unscathed, shares quickly rebounded, all while providing stakeholders reassuring dividend payouts.

T stock chart as of 8/25/24. Source: TradingView

Since 2021, AT&T's stock performance has been a subject of considerable attention, particularly due to its strategic decisions and market conditions. In early 2021, AT&T faced challenges related to its heavy debt load and a competitive telecommunications industry, which negatively impacted investor sentiment. The company underwent significant restructuring, including the spinoff of its WarnerMedia division, which aimed to reduce debt and refocus on its core telecommunications business. Following these changes, AT&T's stock initially saw fluctuations as it adjusted to a new operating model and market expectations.

Throughout 2022 and into 2023, concerns about rising interest rates, inflation and competition from other telecom providers continued to affect AT&T's stock price, leading to a mixed performance. Nevertheless, strategic investments in 5G technology and efforts to improve customer service have shown potential to stabilize and boost its stock as investors become optimistic about future growth opportunities.

T Restrictions for Retail Investors

No specific restrictions exist for retail investors who do not have access to AT&T’s privileged information. However, executives or employees of AT&T may fall under blackout period restrictions, such as when the company is about to release its earnings report.

Pros and Cons of T

As a behemoth in its category, AT&T provides stability for investors:

• Passive income: AT&T has a decades long history of not only paying its shareholders a dividend but increasing the payout. Though pressure exists to reduce or suspend it to free up capital, there’s also an incentive to keep it to attract investors.
• Certainty during uncertain times: While no industry is recession-proof, telecom comes close. That’s because you can’t survive in this digitalized world without access to connectivity services. Therefore, T stock provides a measure of economic insurance.
• Compelling content: AT&T absorbed heavy criticism for making pricey deals such as its Time Warner acquisition. But the flipside is that this gives AT&T control of HBO and Warner Bros., which each offer compelling content and popular entertainment brands.

On the other end of the scale, the telecom firm has its drawbacks:

• Opportunity cost: AT&T is a mature company in a mature industry, which means the chances of T stock soaring to the moon is minimal. Therefore, those seeking strong capital gains risk an opportunity cost if they pass up growth firms that later make good on their potential.
• Market volatility: Investing in AT&T stock can be risky due to market volatility and fluctuations in share prices, which may be influenced by various external factors such as economic conditions, interest rates and competitive pressures in the telecommunications industry.
• High debt levels: AT&T has historically carried high levels of debt, which can pose risks to the company's financial stability and growth potential.

An Old Dog with Some New Tricks

As a dividend aristocrat, investors have long depended on AT&T to provide robust, reliable passive income and it has delivered. While it doesn’t have the pizzazz of growth stocks, the telecom firm’s slow-and-steady approach appeals to many investors who fear an unsustainable situation brewing in the global markets.

At the same time, AT&T has the potential to tap into relevant sectors, primarily content streaming. Thanks to its Time Warner acquisition, the company leverages an enviable entertainment brand empire.

The biggest question is whether AT&T’s new tricks are enough to overcome its flaws, mainly its debt load. The broader transition to streaming and connected services may tip the narrative in favor of T stock.

Frequently Asked Questions