AT&T Stock ( NYSE:T )
A prospective dividend cut caused AT&T Inc. ( NYSE:T ) to drop to a decade-low in October, but the stock has since recovered.
Better-than-expected fourth-quarter earnings , which included a positive outlook for free cash flow in 2023, have supported AT&T’s recent advances.
The best news passive income investors have heard in a year is probably that AT&T’s dividend is protected by enough free cash flow, despite the possibility of a stock fall after a tremendous run-up. As a result, AT&T’s long-term risk appears to be a dividend decrease.
AT&T Exposes The Market’s Fallacy
A major cause of worry was a prospective dividend cut, which affected AT&T stock price in 2022.
The company warned of threats to its free cash flow due to extremely high inflation rates, which were delaying AT&T’s customers’ timely payment of bills, in its second-quarter earnings report, which heightened concerns. The predicament for AT&T’s stock was made worse by a fall in free cash flow projection from $16 billion to $14 billion in the results announcement.
Despite my predictions that it would, given that inflation hit 40-year highs in 2022, AT&T’s free cash flow did not worsen. However, as the year came to a close, inflation began to slow, relieving pressure on AT&T’s customer base.
At the conclusion of the year, AT&T’s free cash flow did fall within the anticipated range.
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