AT&T And Verizon Q2: Assessing Dividend Cut Possibility

Aug. 03, 2022 3:38 PM ETAT&T Inc. (T) Stock, VZ Stock, , , , , , , 72 Comments

Summary

  • Both AT&T and Verizon have posted disappointing Q2 results.
  • More worrisome, AT&T’s free cash flow in 1H 2022 was not even sufficient to cover its dividends.
  • This article assesses their dividend safety holistically (beyond the common payout ratios) by considering their capital investment plans, debt obligations, et al.
  • And my conclusion is Verizon is still safe, and I don’t see a possibility of a cut in the near future.
  • But the safety of AT&T now is on the borderline, and a cut is a realistic possibility.
  • This idea was discussed in more depth with members of my private investing community, Envision Early Retirement. Learn More »

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Thesis

My last article comparing AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ) was co-produced with Sensor Unlimited back in May after their Q1 earnings reports ("ER"). That article focused on the impact

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This article was written by

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Envision Research, aka Lucas Ma, has over 20+ years of investment experience and holds a Masters with in Quantitative Investment and a PhD in Mechanical Engineering with a focus on renewable energy, both from Stanford University. He also has 30+ years of hands-on experience in high-tech R&D and consulting, housing sector, credit sector, and actual portfolio management.

He leads the investing group Envision Early Retirement along with Sensor Unlimited where they offer proven solutions to generate both high income and high growth with isolated risks through dynamic asset allocation. Features include: two model portfolios - one for short-term survival/withdrawal and one for aggressive long-term growth, direct access via chat to discuss ideas, monthly updates on all holdings, tax discussions, and ticker critiques by request.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of VZ 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.

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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