The 24/7 Wall St. 2012 Model Portfolio has been on a roll with dividend hikes, ahead of plan in some cases.  AT&T Inc. (NYSE: T) is one we have felt offers better risk-reward parameters currently over Verizon Communications Inc. (NYSE: VZ) because it has a higher yield.  It is also more attractive because the pullback from the likely failed T-Mobile acquisition break-up penalty put real pressure on the shares.

Now AT&T has come out and increased its dividend.  We expected an increase as the telecom giant has maintained a history for over two-decades of dividend hikes.  Still, there were some questions over whether or not AT&T was at a 100% chance of a dividend hike again.

The 2.3% increase is another incremental hike as the payout is moving to $0.44 from $0.43 per share per quarter.  This is effectively an increase from $1.72 to $1.76 a share on an annualized basis, and the $28.73 share price right now generates a dividend yield of 6.12%.  That is almost a full percentage point higher than Verizon’s dividend yield of about 5.2%.  AT&T is now down 10% from its 52-week high versus only about 1% for Verizon.

All those fears that AT&T was going to lose all of its iPhone subscribers to Verizon and now to Sprint Nextel Corporation (NYSE: S) have just not come about.  Sprint also does not even pay a dividend because it is losing so much money. AT&T is by far the highest yield of all 30 DJIA components.

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