Looking for a dividend growth stock that offers a market-smashing yield of near 7%? Want some growth on top of that huge yield? Would you like to be at the center of two megatrends?

AT&T Inc. - stock ticker T - is a multinational media conglomerate that provides communications and digital entertainment services in the US and internationally, and possibly one of the best stocks to buy now. Co-founded by Alexander Graham Bell in 1885, AT&T is now a $216 billion (by market cap) media juggernaut that employs almost 250,000 people. FY 2020 operating revenue breaks down across the following reportable segments: Communications, 79%; WarnerMedia, 17%; and Latin America, 3%.

Their largest segment, Communications, provides wireless and wireline telecom, video, and broadband services to millions of consumers. They're one of the largest telecom companies in the world. If that's all they were, it'd be impressive - smartphones are almost an additional appendage at this point, and mobile communications/data is practically as important as electricity now. But they have a very significant media business on top of it. WarnerMedia, through major properties Turner, Home Box Office, and Warner Bros., develops, produces, and distributes feature films, television content, and other digital content across a variety of platforms.

Streaming has never been more important for both companies and consumers than it is now, especially after the pandemic struck in 2020. More people than ever before are streaming content. That bodes well for AT&T in two ways. First, there's the increased demand for broadband, which they offer across both wireless and wired connections. Streaming only serves to bolster that demand. And with 5G just now rolling out and AT&T set to become a major 5G provider, AT&T's position will strengthen.

Second, now acting as a major streaming player, they have a growing audience and huge addressable market for content production and distribution. If there was ever a time to jump into streaming with full force, it's now. That's exactly what AT&T is doing.

AT&T has already increased its dividend for 36 consecutive years, making them a Dividend Aristocrat. And while the 10-year dividend growth rate of 2.2% is nothing to write home about, you have to consider that this stock offers a market-smashing yield of 6.9%. That's more than four times higher than the broader market's yield. It's also 110 basis points higher than the stock's own five-year average yield. Oftentimes, a yield this high indicates an unsafe dividend.

However, I would argue that this is an exception. The payout ratio is only 65.4%, using FY 2020 adjusted EPS. Moreover, the FCF payout ratio for the full year came in at only 55%. I see the dividend as safe.

Morningstar rates T as a 4-star stock, with a fair value estimate of $36.00. CFRA rates T as a 3-star "HOLD", with a 12-month target price of $35.00. We have a super tight consensus here. Averaging the three numbers out gives us a final valuation of $35.45, which would indicate the stock is possibly 17% undervalued.

Here's the bottom line, guys: AT&T Inc. has built an impressive telecom and media conglomerate that's vertically integrated and positioned at the center of two megatrends. With a market-smashing yield of near 7%, more than 35 consecutive years of dividend increases, a well-covered dividend, and the potential that shares are 17% undervalued, this Dividend Aristocrat might be perfect for dividend growth investors looking for income.

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