Text dimension
AT&T
Justin Sullivan/Getty Images
AT&T
inventory is shedding worth on Thursday, after an enormous miss on second-quarter free money movement and lowered steering for the rest of the yr. That overshadowed robust subscriber positive aspects and operational efficiency within the interval.
That stock-price decline is lifting AT&T shares’ (ticker: T) annual dividend yield.
The telecommunications big has lengthy been a favourite amongst revenue traders, with a juicy yield and steady money flows backed by recurring income from subscriptions and excessive limitations to entry within the asset-intensive trade. This yr introduced a dividend minimize when AT&T spun off WarnerMedia, as the corporate doubled down on investing in its 5G and fiber networks.
AT&T’s present dividend dedication is for round $8 billion yearly, or $2 billion 1 / 4. The firm generated $1.4 billion in free money movement within the second quarter reported on Thursday, far wanting the $4.7 billion that analysts have been anticipating. It additionally means AT&T’s free money movement for the quarter didn’t cowl its dividend dedication within the interval—not what revenue traders wish to see.
Management lowered its 2022 free money movement steering to $14 billion, from $16 billion, on Thursday. That would carry AT&T’s dividend payout ratio to about 57% in 2022. The firm continues to anticipate $20 billion in free money movement in 2023, for a more healthy dividend payout ratio of 40%.
Newsletter Sign-up
Review & Preview
Every weekday night we spotlight the consequential market information of the day and clarify what’s more likely to matter tomorrow.
The $8 billion in annual dividend funds interprets to $1.11 per share yearly. At AT&T inventory’s roughly $18.60 on Thursday morning, down 9%, that’s an annual dividend yield of 6%. It compares with rival
Verizon Communications
‘ (VZ) dividend yield of 5.4%, and the
S&P 500
’s
1.5%.
It places AT&T among the many high handful of dividend payers within the index. First on the listing is fellow telecom firm
Lumen Technologies
(LUMN), with a 9.6% annual yield, adopted by tobacco big
Altria Group
(MO), whose inventory yields 8.5%. Next up are a pair of actual property shares,
Vornado Realty Trust
(VNO) and
Simon Property Group
(SPG), yielding 7.3% and 6.6%, respectively.
AT&T ranks seventh within the S&P 500, adopted by Verizon at ninth. Three firms are tied for tenth-highest yield within the index, every with 5.3% annual dividend yields.
Here’s the total listing:
Company / TickerRecent PriceAnnual Dividend Per ShareAnnual Dividend YieldLumen Technologies / LUMN$10.39$1.009.6%Altria Group / MO$42.42$3.608.5%Vornado Realty Trust / VNO$29.11$2.127.3%Simon Property Group / SPG$103.45$6.806.6%Oneok / OKE$57.63$3.746.5%Kinder Morgan / KMI$17.55$1.116.3percentAT&T / T$18.60$1.116.0%Dow / DOW$50.94$2.805.5%Verizon Communications / VZ$47.79$2.565.4%Phillip Morris International / PM$94.55$5.005.3%Williams Cos / WMB$32.03$1.705.3percentIBM / IBM$125.48$6.605.3%
Source: FactSet