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AT&T: Enough Is Enough, The 7.3% Yield Is Dirt Cheap

May 26, 2023 6:20 PM ETAT&T Inc. (T)VZ239 Comments
The Asian Investor profile picture
The Asian Investor


  • AT&T and Verizon have seen valuation pressure related to rumors that Dish Network is partnering with Amazon to sell wireless plans.
  • However, AT&T confirmed its free cash flow forecast for FY 2023.
  • AT&T’s shares just made a new 2023 low and the yield of 7.3% surpasses the company's P/E ratio.

AT&T Advises Its Over 200,000 Workforce To Work From Home, As Coronavirus Continues To Spread

Ronald Martinez

AT&T (NYSE:T)'s and Verizon (VZ)'s shares have experienced considerable selling pressure in recent days as the Wall Street Journal reported that DISH Network (DISH) was said to announce a partnership with e-Commerce giant

This article was written by

The Asian Investor profile picture
I look for high-risk, high-reward situations. Five largest portfolio holdings: Bitcoin, SoFi, Alibaba, PayPal, Western Alliance. Early buyer of cryptocurrencies. I live in Thailand :)

Analyst’s Disclosure: I/we have a beneficial long position in the shares of T, 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.

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Comments (239)

bobsar profile picture
When we actually know what the "lead Problem" is in actual $ then we'll see that T is oversold. How much? What is T's share. How long to fix it ie how much per year. Also I'm thinking that The Dish/Amazon thing is bogus.
sancerrefrankie profile picture
can we now it the get out the T @The Asian Investor why faling down like lumn someting wrong 52 weak lows why you think this t y @The Asian Investor
(plese can you write it the cruses if you can busy schule t y @The Asian Investor )
Is this Senator Fetterman?
I remember the argument a couple of years ago when AT&T was in the high twenties...Boy, did a lot of long term unassuming investors get scammed...
@FunInvesting "Boy, did a lot of long term unassuming investors get scammed..."

Yep, I was one of them... I sold most of my T for a small loss, but still hold a full position.... and another full position of WBD. I wish that I had sold it all. Now I'm stuck with it.
@fun2roc I’m in your same boat, I’m treading water.
jakeelwood5 profile picture
I am happy to collect the dividend while the economy is on a downward trend, but if and when T goes to $20 again, a lot of shares will sell off, driving it down again.
Marieee profile picture
@jakeelwood5 agree a lot of resistance at 20
@Marieee 20, 20 how about 5?
I feel fortunate to have sold at 33$ the day of the announcement of the TW spinoff. Collected a lot of dividends so not too bad performance wise. The way mgmt executes does may me wonder at times.

Nonetheless, if another 5% is shaved off the price, I’m jumping back in.
Will the author be saying the same thing when the dividend is at 10% and the stock lowers to $11 per share? Looks like a dividend trap to me.
Love your comment, "I believe the sell-off yesterday, which caused AT&T's shares to drop to a new 2023 low, is a huge opportunity for dividend investors to buy into the telecom at a much higher yield and at a discounted valuation!"

For the past 10 years or so, every time T goes down or cuts their dividend, someone writes a column about what a "deal" or "buy" it is. New management, blah, blah, blah.

Gimme a break...well what has T done the past 10 years...ummm...stock price down 40% and dividend cut 38%. Buy a simple S&P index fund and you would have been light years ahead. What has the S&P done the past 10 years...ummm up 157% plus an average 2% dividend each of those 10 years. I rest my case.
CDs and T. Dividends paid by both are very important to the investor. Dividend earnings are compounded by both. Income Growth is our goal. CDs 4.75%, T at 7.3%, MO at over 8.0%, etc. Huge cash flow this year as a result. Portfolio gain reported at over 14% so far this year.
@Income Growth, CDs are at 5.3% now. T is not trustworthy.
@jimoc cds are taxed at your income rate so need to do some math to see if worth it for you. Dividend is taxed much lower for me so risk is worth the 50% difference in after tax income returns. Added bonus is possible capitsl gains that i think will hsppen over 5 year timeline.
@jimoc Bought CDs at the current high a while back. Earned several thousand before they rose to 5.3%.
I believe the risk/reward is worth owning a few shares of AT&T at the current price. I also expect a 25%+ price gain by year end.
Clauser1960 profile picture
ATT yield has been cheap over the last 5 years
The stock price is in the doldrums. Better to suspend dividend for a couple of years and use fcf to pay down debt. Otherwise they will continue to chase their tail.
@notre, glad you're not in charge.
@jimoc I guess it’s better to get a dividend when your principal erodes.
Obviously it’s an investment where you see real return decades later.
@notre, resize the dividend, lol. T is lucky Enrons existed to keep it from being the worst there is.
The only temptation to add to T would be to help myself dig out of a hole. T is by far my worst performing investment, and I did not buy what I believed to be an over priced firm. This is an execution and management failure. I dream that some day Randall Stephenson may suffer a compensation claw back but I'll leave that to my fantasies.
Just switched to T-mobile because it was a much better deal (monthly charges for 5 phones)...I have T and keep it to remind me why I didn't sell it long ago....the WBD shares so far are worse than garbage. I was with Verizon, but there support is beyond horrible.
Brent Ericson profile picture
You can get a risk-free 5% or more from CDs or money market funds.
The dividend and risk of capital loss with declining stock price make T a horrible investment option.
whiff profile picture
Broken record ...
Hasn’t T ruined enough lives?
Other 6% yielders with not much risk.
At what point will people stop with T.
It’s giving me all the tax loss selling I could ever need.
@jimoc The market has not rewarded T for the strides it has made over the last year. Q1 they paid their annual incentives and it causes a 15% sell-off.. Insane.
@Scott.dam, T is to blame for where it is, no one else.
@jimoc I'm not sure you got my point.. 11 straight quarters of 400K + gains in postpaid phone subs.. They have done well.. poor messaging from management granted.
GetRealHere profile picture
Dont be a Melvin, avoid this stock...avoid individual stocks in general and buy something that makes you rich: QQQ. Go do something productive.
The Asian Investor profile picture
@GetRealHere QQQ appeals to a different group of buyers...
@GetRealHere QQQ has been great for us. Last year with the drop in techs we bought MSFT, META, NVDA and TSLA. It drop some more after our purchases and we added more. Down for the year but this year with our portfolio including many tech stocks we are up 78% YTD and it is almost June. Only delusional T investors buy T claiming their great dividend but never mention the destruction of their principle. I followed T from the mid 30s to now below 16. Decade or more of losing value. Yeah that great dividend due to ever decreasing share price is great. Just turn a blind eye to all the money you lost in your principle. Even your reinvested dividends have been losing value all these years. T is nothing but a value trap.
t fired the first shot in the price war. Vz will reluctantly respond soon, out of desperation. Then the fireworks will fly, to the chagrin of the shareholders.
There are many public companies that are walled cities that are run for the benefit of the management, boards and union employees, with no regard for shareholders. It doesn’t take a genius to spot them.
Decided to invest again in T. Placed limited order for next Tuesday.
Last year I owned and then sold T for a nice profit. So, if my buy materializes on Tuesday, minus my profit when last sold, my actual share investment cost will be $11.50 a share. Looking forward to a 7.3% dividend to increase our Income Growth.
Sold all my T shares to buy regional bank shares during the bank crisis of march and made a huge profit. I might consider buy T again during its next sell off when price moves below 15 $...
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