When a Company Has to Constantly Tell You Its Dividend Is Safe
When a Company Has to Constantly Tell You Its Dividend Is Safe
Telecom giant AT&T's (T) stock has been clobbered recently, and for good reason...
As big as it is, with a market cap of roughly $100 billion, AT&T is increasingly looking like a company in peril.
Look no further than its free cash flow, which was $1 billion last quarter. That's a lot of money, except it was one-third of what investors were expecting... and about half the company's dividend payout.
Since then, AT&T now faces a new migraine: fallout from a Wall Street Journal investigation into potentially toxic lead network cables that are buried throughout the country. And since AT&T has the biggest coverage, it's generally believed to have the most exposure.
At risk, it would seem, is AT&T's dividend, which was cut and frozen last year after the company spun off its WarnerMedia unit...
For any company as iconic and large as Ma Bell, cutting a dividend is like a whisper... Freezing it is like a tap on the shoulder.
Eliminating it would be a brick on the head. This would also be …