AT&T ( NYSE:T ) stock has long been a darling of dividend investors. It’s simple to see why. The telecom behemoth’s stock presently yields a whopping 7%, making it one of the highest-yielding companies in the S&P 500 broad market index.
Let’s take a deeper look at AT&T’s business fundamentals to determine whether its stock is an excellent long-term investment at these current levels.
The AT&T stock bull argument
Wireless and broadband internet services have become critical utilities for millions of people. Telecommunications firms generally have stable customer and revenue bases, allowing them to produce abundant, constant free cash flow. This is primarily true for AT&T stock ( NYSE:T ) , which investors like for its consistent cash flow generation and big cash payments.
However, when AT&T purchased Time Warner in 2018, it deviated from its core telecom activities. The $85 billion transaction hit AT&T with billions of dollars in new debt. Worse, most of the growth and cost-cutting promises made by management did not materialize.
AT&T has refocused its efforts on its greatest businesses under new CEO John Stankey. AT&T liquidated its Warner Media holdings in April by combining them with Discovery. The newly amalgamated firm, Warner Bros. Discovery (WBD), now has the potential to become a formidable player in the media sector due to its larger size.
AT&T also gained 316,000 users to its high-speed fiber internet service. This help...
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