AT&T: At $25 A Share, 8% Dividend, And The WarnerMedia Spinoff, It Is Worth A Look

Nov. 08, 2021 8:30 AM ETAT&T Inc. (T)NFLX454 Comments

Summary

  • The market continues to perceive AT&T as dead money which could be a long-term opportunity for investors with a long time horizon and a strong stomach.
  • AT&T's decline continues regardless of the fact that they continue to generate tremendous amounts of revenue, tens of billions in FCF, and their debt level is manageable.
  • I think management's decision to spinoff WarnerMedia and combine it with Discovery will unlock value for shareholders as the new entity will have tremendous growth potential.
  • Based on today's numbers and using revenue as the valuation metric for the spinoff, legacy T on the low end would still generate a dividend that exceeds 5%.

AT&T Mobility Wireless Retail Store. AT&T now offers IPTV, VoIP, Cell Phones and DirecTV

jetcityimage/iStock Editorial via Getty Images

Obviously, the market hasn't been a fan of AT&T (NYSE:T), and many investors consider T an investment where capital goes to die. The chart is horrible as shares have declined by -8.3% over the past

This article was written by

Steven Fiorillo profile picture
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Author of Barbell Capital
Build your portfolio utilizing growth, value, dividends and options

I am focused on growth and dividend income. My personal strategy revolves around setting myself up for an easy retirement by creating a portfolio which focuses on compounding dividend income and growth. Dividends are an intricate part of my strategy as I have structured my portfolio to have monthly dividend income which grows through dividend reinvestment and yearly increases. Feel free to reach out to me on Seeking Alpha or https://dividendincomestreams.substack.com/

Disclosure: I/we have a beneficial long position in the shares of T, AAPL either through stock ownership, options, or other derivatives. 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.

Additional disclosure: Disclaimer: I am not an investment advisor or professional. This article is my own personal opinion and is not meant to be a recommendation of the purchase or sale of stock. Investors should conduct their own research before investing to see if the companies discussed in this article fit into their portfolio parameters.

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