Finding stocks that will outperform the market is no easy task. Indeed, according to First Trust advisors, only 28% of stocks outperformed the S&P 500 in 2024.

That said, it's not impossible to identify market-beating stocks. So, let's look at one stock that has outperformed the market recently, and, in my opinion, will continue to outperform: AT&T (T -5.41%).

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The turnaround has finally arrived

It's taken years, but the long-awaited turnaround in AT&T shares finally seems to have arrived. Between 2016 and 2022, AT&T stock slowly faded, losing roughly 50% of its value. Even after accounting for the large dividend payments the company made, investors found themselves with no total return, despite six years having passed.

However, since the start of 2023, shares of AT&T came back to life. The stock advanced by roughly 50% since then. Once dividend payments are added into the mix, shareholders have enjoyed a total return of nearly 70%.

It's all thanks to a change in strategy that appears to be paying off. AT&T shifted gears, spinning off its pay-TV unit (DirecTV), and is now focusing on wireless and fiber connectivity.

In addition to narrowing its strategy, last year's deal also raised billions in cash for AT&T, which is helping the company to reduce its enormous debt load. As of this writing, AT&T has over $122 billion in net financial debt. However, that's down almost 10% from $136 billion less than two years ago.

Lower debt is great for several reasons. First, as most of us understand, high debt can become a burden. For a business, large debt payments can crowd out investment opportunities. Second, high debt loads are troubling to value investors, as they can threaten a company's ability to drive shareholder value in the form of dividend payments or share buybacks.

So, as AT&T pays off its debt, its dividend becomes safer. Indeed, the company paid its current quarterly dividend of $0.278/share since 2022. Its current dividend yield of 4% is the lowest in about 20 years.

T Dividend Yield data by YCharts

Yet the reason for the falling dividend yield is quite bullish: AT&T shares have advanced significantly, bringing down its dividend yield.

Can AT&T maintain its winning ways?

In short, yes, I think it can. In fact, I believe the company's stock will outperform the market, thanks to its renewed focus on its core business and several key developments.

For example, by shedding the pay-TV business, AT&T can now focus on attracting and retaining customers -- particularly business customers who want fast, reliable wireless and fiberoptic service.

Second, AT&T could become one of the biggest beneficiaries of the artificial intelligence (AI) revolution. The company is massive, with about 150,000 employees and more than 240 million customers.

It's that sort of scale that's overwhelming for any one person to really wrap their head around. However, for AI, AT&T's vast network of employees and customers could prove the perfect case study. If AT&T can utilize AI properly, untold efficiencies could be hiding in plain sight. Improving processes, upgrading systems, and delivering higher customer satisfaction could help AT&T's long-suffering operating margin, which hasn't hit 25% this century.

AT&T could be a diamond in the rough. Granted, the company still has its challenges. Its revenue is pretty stagnant and its enormous debt load remains a problem to be solved.

Nevertheless, the company's recent performance shows that AT&T can beat the market if it continues to execute -- and, in my opinion, it is likely to do just that.