[ad_1]
AT&T Inc. is no longer the wireless industry’s least-loved name, and one milestone that occurred last week made it clear.
AT&T shares T, but
Verizon VZ rose following the company’s Thursday morning earnings report, showing continued growth in subscribers.
Shares tumbled Friday morning as the wireless rival posted its third straight quarter of subscriber declines. Amid Thursday’s price swings, AT&T’s dividend yield fell below Verizon for the first time since his March 6, 2020.
AT&T’s dividend yield fell below Verizon’s last week for the first time since March 2020.
fact set
Rising dividend yields aren’t always a good sign. A fall in stock prices could further dampen investor sentiment. Conversely, for AT&T, the decline in yield comes as Wall Street becomes increasingly favorable to the company’s execution and prospects.
Read: AT&T’s ‘much simpler story’ and ‘solid’ dividend upgrade stock
AT&T’s dividend yield was high at 7.81% on Oct. 12, but the stock has risen 24% in the meantime, to 6.12% as of Wednesday. Verizon’s current yield is 7.14%.
See more: AT&T stock has its best week since 2000 as analysts say there’s “at least a plausible case of optimism”
Morgan Stanley analyst Simon Flannery highlighted in a note to clients Wednesday that AT&T’s 17% outperformance last week put the dividend yield “inside the VZ range for the first time in years.” But AT&T’s latest earnings “looked cleaner,” he wrote. Verizon’s more mixed results.
“AT&T’s results should provide ample solace for investors looking for a relatively defensive name heading into year-end, and a dividend yield of over 6% should also support the stock,” Flannery said. So I think it’s good enough at the moment,” he said.
AT&T’s dividend and its ability to support it is a big concern for investors, and the company tried to reassure them after recording $3.8 billion in free cash flow from continuing operations in the third quarter.
“We hope that our strong free cash flow this quarter will give us confidence that we can reach our annual free cash flow target in the $14 billion range, which will be sufficient to support our $8 billion dividend commitment. It’s good enough,” Chief Executive John Stankey said on the company’s earnings call.
Verizon’s earnings call also included a mention of its dividend commitment, with Chief Financial Officer Matt Ellis saying the company has increased its dividend for the last 16 years in a row.
“We recognize the importance of dividends to our shareholders and intend to continue to hold the board in a position to approve annual dividend increases,” he said.
Tommi Kilgore contributed to this article.
[ad_2]
Source link
