Stock price when the opinion was issued
Improved since fall 2023. 6.5% dividend yield, attractive, pretty secure. Price broke above 200-day MA. With yields falling, dividend stocks are more appealing. Seems to have bottomed, as long as rates stay stable or continue to fall. Total return, though, is not tremendous. Cheap, but only 2% earnings growth expected, and he likes double-digits.
The wireline business is more difficult to build out and AT&T has a big presence in that area in the U.S He prefers Canada over the U.S. which is more competitive. He prefers BCE which already has a large wireline footprint and can bundle it with wireless. BCE raised its dividend by 3% a while ago and he has concerns over the payout ratio being more than 100%. However he thinks the dividend is sustainable.
Seeing resilience in the stock price right now. Fundamentals are hard to determine. Lots of mistakes in company management in the past. Pricing power not great. Could be a good dividend investment, but hard to justify when compared to other options in the markets. Overall, would not recommend investing.
Likes their DirecTV acquisition the most. It gave them a lot of different synergies, expense and additional revenue to wring out. Your biggest risk right now with telecom is interest rates. These companies are very sensitive. Pays a 4.5%-5% dividend yield. This is really a call on rates. If we have low rates, this will continue to chug higher, but if they accelerate, this is going to get hurt.