AT&T-Discovery Deal: Great For Shareholders, But With An Undercover Dividend Cut

Summary

  • This deal creates a media giant that will be more competitive in the current streaming wars, which is great for shareholders.
  • AT&T will be able to reduce its debt load massively, which could result in upside potential as the market will worry less about debt levels.
  • Investors should, however, also notice that the overall income they will receive going forward will likely be lower.
  • Looking for a helping hand in the market? Members of Cash Flow Kingdom get exclusive ideas and guidance to navigate any climate. Learn More »

Das Konzept des Wortes M&A auf Würfeln auf einem schönen grünen Hintergrund
Photo by Zhanna Hapanovich/iStock via Getty Images

Article Thesis

AT&T's (NYSE:T) deal to combine its media assets with those of Discovery (DISCA) looks very solid, as this will serve several purposes. It will lead to increased scale and

Is This an Income Stream Which Induces Fear?

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This article was written by

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Jonathan Weber holds an engineering degree and has been active in the stock market and as a freelance analyst for many years. He has been sharing his research on Seeking Alpha since 2014. Jonathan’s primary focus is on value and income stocks but he covers growth occasionally.

He is a contributing author for the investing group Cash Flow Club where along with Darren McCammon, they focus on company cash flows and their access to capital. Core features include: access to the leader’s personal income portfolio targeting 6%+ yield, community chat, the “Best Opportunities” List, coverage of energy midstream, commercial mREITs, BDCs, and shipping sectors,, and transparency on performance. Learn More.

Analyst’s Disclosure:I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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