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Started By
Message
re: ATT has to be a screaming buy Yes No?
Posted on 7/21/22 at 4:39 pm to SloaneRanger
Posted on 7/21/22 at 4:39 pm to SloaneRanger
quote:
Never buy a stock just for the dividend.
Just not true
I’ve owned several stocks and hybrid equity investments just for their dividends going on 20 years.
I don’t recommend it on all cases but saying “Never” is just not true
1
Posted on 7/21/22 at 4:42 pm to Drizzt
quote:
T is a cash machine and the current price seems good to me based on P/E under 9. That said, I’ve got my next order set at $17 and I think it will get there when we hit full recession.
It certainly has a ton of cash flow but what is alarming about their earnings report is that top line growth was less than 3% which tells me that they have little pricing power even in the current inflationary environment.
Posted on 7/21/22 at 5:14 pm to Tomatocantender
Doesn’t ATT have more debt than almost any other company. Need at least a strategy to pay that down
Posted on 7/21/22 at 7:54 pm to skewbs
quote:
I'm in a similar situation, although not the same. My average cost is $20.1/share so it dipped in the red today with the large % drop.
I'm actually about even when you factor in the dividends I've received and re-invested over the past 2.5 years. Still not good at all though
I've been buying my cost down and bought more today. My plan is to exit my position entirely the next time it pops above $20/share. Hopefully that is sooner than later. I'm tired of looking at T in my trading (separate from my investing) account.
Believe I will keep my 9k shares of PDO acquired below $14/share bought at a significant discount to NAV while yielding over 10% and let PIMCO do the heavy lifting. I don't get anyone's attraction to T, it has done nothing for seemingly forever. I will bet the total return of the ETF SCHD will blow the doors off T over the next 5 years, T is just not worth it.
Posted on 7/21/22 at 8:34 pm to PotatoChip
quote:
Doesn’t ATT have more debt than almost any other company. Need at least a strategy to pay that down
What’s the US Govt strategy for paying down debt?
Too big to fail baw
Posted on 7/21/22 at 9:47 pm to Tomatocantender
What’s ATT’s plan when Elon gets starlink up and running?
Posted on 7/21/22 at 10:00 pm to SlidellCajun
quote:
Just not true I’ve owned several stocks and hybrid equity investments just for their dividends going on 20 years. I don’t recommend it on all cases but saying “Never” is just not true
Nah, it’s true. Buying a stock solely for the dividend and saying “even if it just stays flat I’ll get 5%/year in income” is a recipe for disaster. There has to be another reason to like a stock, because as many T shareholders can tell you, watching your principal deteriorate faster than the dividend is no long term strategy.
The saying about buying it for the dividend is meant to address the people who look no further into the company. Sure, it can work out, but it’s a terrible strategy.
Posted on 7/21/22 at 10:23 pm to PotatoChip
quote:
Doesn’t ATT have more debt than almost any other company. Need at least a strategy to pay that down
Yes, it is. And that, along with relatively flat earnings growth, hampers its ability to grow the dividend - especially since it already has an 87% payout (VZ has a 49% payout).
I’ve owned both in the past, but I don’t own either now. But if I was forced to choose between the two major telecoms (T or VZ), the dividends are close enough (roughly 5.87% for T and 5.37% for VZ) that I would then consider the earnings growth prospects of each, the div. growth prospects of each, indebtedness, etc. From 1000 feet, looks to me like VZ is the healthier all around play - but only if it’s a chocolate or vanilla choice. But hey, maybe T management might start hitting home runs and turn this thing around. But I haven’t seen any indication that this particular management group is capable of doing that.
IMO, it’s when people start chasing higher than normal dividends that they can get trapped. I often look for healthy, sustainable and growing dividends in my investment account. But years ago, I learned the hard way not to chase high dividends without taking a deep dive into the financials.
Posted on 7/22/22 at 7:23 am to slackster
quote:
Nah, it’s true. Buying a stock solely for the dividend and saying “even if it just stays flat I’ll get 5%/year in income” is a recipe for disaster.
What I’m telling you is that it literally is not a recipe for disaster. I’m speaking from real world experience. Now maybe there
Are some cases that are disasterous but from my experience, owning att and others, for their yield, has not been disasterous.
I have a portfolio consisting of several stocks and ETF’s and some of the stocks and ETF’s are purely for dividend yield. Some are for growth.
Overall, the portfolio yields a decent 3.4%.
Some of these stocks are yielding over 5% from what I paid years ago because they continually increase their dividend payout.
Having att just for the yield in this portfolio is not a recipe for disaster.
This post was edited on 7/22/22 at 7:52 am
Posted on 7/22/22 at 7:33 am to SlidellCajun
I bought ET in 4/20 solely for the distribution, added several times. I read lots of wall street opinion pieces saying not to do that. Frankly it's been my best investment to date*
*Just because my DA didn't trim SLI over 12.
*Just because my DA didn't trim SLI over 12.
Posted on 7/22/22 at 7:37 am to Wraytex
I like ET too. Bought around same time.
Posted on 7/22/22 at 7:56 am to Wraytex
quote:
I bought ET in 4/20 solely for the distribution,
I have that too and bought for the dividend. I also got Center coast Brookfield fund which holds Energy Transfer. Center coast is yielding over 9% and believe me… I don’t hold for price appreciation.
Posted on 7/22/22 at 8:01 am to SlidellCajun
quote:
but from my experience, owning att and others, for their yield, has not been disasterous.
If the only reason you own them is because they pay a dividend, you need a better screen.
It may be semantics, but you have to consider the actual company and how they create the free cash flow necessary for those dividends. Dividends can be cut and prices can fall faster than dividends. Just screening the Russell 1000 for the top yields is a good place to start, but you need a little more thought than that for suitability.
Posted on 7/22/22 at 8:03 am to Wraytex
quote:
bought ET in 4/20 solely for the distribution
You may have bought it solely for yield, but it’s got pretty solid financials too. How did you choose ET out of all the other MLPs available?
Posted on 7/22/22 at 8:04 am to Jag_Warrior
quote:
Yes, it is. And that, along with relatively flat earnings growth, hampers its ability to grow the dividend - especially since it already has an 87% payout (VZ has a 49% payout).
I’ve owned both in the past, but I don’t own either now. But if I was forced to choose between the two major telecoms (T or VZ), the dividends are close enough (roughly 5.87% for T and 5.37% for VZ) that I would then consider the earnings growth prospects of each, the div. growth prospects of each, indebtedness, etc. From 1000 feet, looks to me like VZ is the healthier all around play - but only if it’s a chocolate or vanilla choice. But hey, maybe T management might start hitting home runs and turn this thing around. But I haven’t seen any indication that this particular management group is capable of doing that.
I hear you but I also think there's a dumb proof safety net built in for ATT after midterms, and that's the fiber and broadband windfall from the Infra Bill that should really ramp up 1/1/23.
Posted on 7/22/22 at 8:15 am to RebelExpress38
quote:
What’s ATT’s plan when Elon gets starlink up and running?
I hope Starlink is a game changer but I have no confidence that it will be rolled out to rural communities like its website promises. My area says approx. March 2023 drop date. I will come back on here and eat crow if it's even available within the next 2 years. And even then, I still can't see how it would compete with the city dwellers large neighborhoods and their underground utilities with fiber optics. And my last concern with Starlink is the installation and field tech support with this company. Sounds like the average rural person is SOL if anything breaks with Starlink. We'll see. Call me very cautiously optomistic.
Posted on 7/22/22 at 8:30 am to slackster
At the time of my original purchase, their debt was pretty excessive. I made the judgement that Kelsy was taking advantage of the political situation to get some projects pushed through that would never happen under a Democrat administration. As far as choosing them, ET has an office in a building here that we have our automation controls in and I've known a few of their guys from that.
Posted on 7/22/22 at 10:00 am to Wraytex
quote:
At the time of my original purchase, their debt was pretty excessive. I made the judgement that Kelsy was taking advantage of the political situation to get some projects pushed through that would never happen under a Democrat administration. As far as choosing them, ET has an office in a building here that we have our automation controls in and I've known a few of their guys from that.
I like ET too, and that’s more “research” than many do about high yield stocks. That’s really my only point - a stock is a high yielded for a reason, so know what you own.
Posted on 7/22/22 at 12:41 pm to Tomatocantender
quote:
I hope Starlink is a game changer but I have no confidence that it will be rolled out to rural communities like its website promises.
They have to do that because starlink's network will max out well under 5 million subscribers worldwide.
Posted on 7/22/22 at 2:02 pm to Tomatocantender
quote:
I hear you but I also think there's a dumb proof safety net built in for ATT after midterms, and that's the fiber and broadband windfall from the Infra Bill that should really ramp up 1/1/23.
I wouldn’t disagree with that. I would just ask if T is any more (or less) likely to be advantaged by that possibility than say VZ? I honestly don’t know. As I mentioned, I just did a quick scan of both companies, since they tend to be compared.
I do understand where you’re coming from with respect to dividends though… and I agree. But as I mentioned, when looking at common shares/equities as investments, my main concern would be the financial health and growth prospects of the company. Getting a 5% dividend is nice, but not if the stock drops 20%. And if that drop is caused by earnings or financial deterioration, there could be a dividend cut (think Ford). So that’s what I meant by dividend growth and sustainability.
But long story short, in my investment account, I lean toward dividend payers too.
P.S. By coincidence, Ari Wald of Oppenheimer is doing a rundown on T, VZ and TMUS (T-Mobile US) on CNBC right now. As a long-short pair trade, he’s recommending long TMUS and short VZ and T. VZ is getting whacked a lot harder than T is today. TMUS is down the least on a down market day. Take that for what it’s worth.
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