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Telecom giant AT&T is officially out of the media business. With the spinoff of WarnerMedia now complete, AT&T can refocus on its core wireless and fiber businesses. There's no question that AT&T destroyed a lot of value with its media acquisitions, but those mistakes are now in the rearview mirror. The new AT&T is a straightforward investment. The company's wireless business is strong, its fiber broadband business is growing, its balance sheet is vastly improved, and the dividend is well covered by free cash flow. AT&T reported nearly 700,000 postpaid phone net additions in the first quarter, along with close to 300,000 fiber net adds. Mobility revenue jumped 5.5%, driven by both service and equipment growth, and broadband revenue surged 6.8% thanks to a 24.7% jump in fiber revenue. The growth story for AT&T now revolves around 5G and fiber. By 2023, AT&T expects to be producing around $20 billion in free cash flow annually. The dividend will eat up $8 billion of that total, leaving plenty of cash to pay down debt. At the current stock price, AT&T trades for around seven times this free cash flow estimate, and its dividend yield is nearly 6%.
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