AT&T Inc., the largest U.S. phone company, boosted its dividend for the 27th consecutive year and said it will buy back as many as 300 million shares as wireless-customer gains help its cash flow.

AT&T raised its quarterly dividend 2.4 percent to 43 cents from 42 cents, representing a 6.5 percent yield on the carrier’s average share price this year. Analysts including Piper Jaffray & Co.’s Chris Larsen and Credit Suisse Group AG’s Jonathan Chaplin, both based in New York, expected 43 cents.

The carrier said in a statement its board also authorized a plan to repurchase as many as 300 million shares, marking the first buyback announcement in three years. At yesterday’s closing price, the buyback would cost $8.77 billion.

AT&T, based in Dallas, boosted revenue by $847 million last quarter from a year earlier to $31.6 billion. Chief Executive Officer Randall Stephenson has attracted 6.1 million wireless customers this year with devices such as Apple Inc.’s iPhone.

Credit Suisse’s Chaplin said he expected a share repurchase plan of as much as $12 billion, while Piper Jaffray’s Larsen said it would be between $8 billion and $10 billion.

AT&T in 2007 set out to buy back about 400 million shares by the end of 2009. It bought 164.2 million shares in 2008 for $6.1 billion and 133,000 in 2009 for about $3 million, according to company statements.

The carrier generated $11.6 billion of free cash flow in the first three quarters, down 16 percent from a year earlier.

AT&T fell 12 cents to $29.11 at 2:18 p.m. in New York Stock Exchange composite trading. The shares had added 4.3 percent this year before today.