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AT&T Inc. (NYSE:T) continues to considerable growth in its Fiber Broadband segment and profited from a nice jump in its free cash flow in 2Q24, both of which make the Telco a compelling option for passive income investors.
AT&T: The More It Rises, The More I'll Buy
Summary
- AT&T's Fiber Broadband growth and increased free cash flow make it a compelling option for passive income investors, with a low dividend payout ratio.
- The Telco's reaffirmed 2024 free cash flow forecast and low valuation based on profits bolster the investment thesis despite recent 52-week highs.
- AT&T's stock remains moderately valued at 9.5x leading profits, with an intrinsic value estimate of $23-$25, driven by robust FCF growth.
- The 5% dividend is solid and sustainable, supported by a payout ratio of less than 50%, making AT&T a buy.
A financial researcher and avid investor with a keen eye for innovation and disruption, as well as growth buy-outs and value stocks. Keeping an eye on the pace of high tech and early growth companies, I write about current events and the biggest news surrounding the industry, and strive to provide readers with ample research and investment opportunities.
Analyst’s Disclosure:I/we have a beneficial long position in the shares of T 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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