(wow) Words Of Wonders Level 499 Answers – At this point, most investors are familiar with the latest AT&T (NYSE: T ) telecom deal. The company spent most of the last decade trying to break into the media distribution space. First, it bought DirecTV to avoid streaming-only plans by buying Time Warner. AT&T is now moving its media business into another spinoff, leaving AT&T once again as a pure phone company.
One stock remains in a good, multi-year decline. A negative price action seems likely because AT&T is a division champion and a household name. The saying “If there is blood in the streets, buy property” comes to mind. However, sometimes closing sentences are clearer than solid advice. The company is now left with solid fundamentals and no future catalyst. In other words…why buy AT&T?
(wow) Words Of Wonders Level 499 Answers
AT&T has suffered a bit of an ongoing identity crisis. If you talk to many AT&T shareholders over the years and ask them why they own the stock, the most popular answer is the big dividend.
Revocup Guatemala Antigua
This is a reasonable answer. AT&T has increased its dividend for each of the last 36 years, and a stock yield of more than 7% is a safe source of income in a very low price/earnings environment.
But somewhat surprisingly, AT&T's management team has spent much of the past decade making big bets on new vertical markets. In 2015, it acquired DirecTV, and a few years later, Time Warner. The total value of these two large contracts is 152 billion dollars.
AT&T took a lot of credit from these transactions and could not afford to lose when AT&T became interested in the media business. After selling DirectTV at a loss, AT&T is now shedding its streaming business and content portfolio under a deal with Discovery ( DISCK ).
Of course, AT&T investors will buy shares in the newly formed media organization, but there are three big implications of this series of events for AT&T. This makes AT&T a pure telecom play. AT&T will focus on its wireless business as well as its broadband footprint.
Shadowlands Great Vault Objectives & Ui
It will also speed up AT&T's withdrawal process. At the end of the deal, AT&T will retain $43 billion in net debt. That would bring AT&T's revenue to around 2.6X EBITDA, with a target of 2.5X by the end of 2023.
As a result, AT&T will reduce its dividend based on the new payment policy. Based on a payout ratio of 40%-43% on FCF of approximately $20 billion, the dividend expense of approximately $8 billion is significantly reduced from the $15 billion paid in 2020. That would move AT&T shares to around $1.12. At the current share price, it yields 3.86%.
The dividend cut is important because it shifts AT&T stock from an unusually large and safe yield to one that can be easily manipulated by income investors.
While focusing on the benefits of merging the media business with Discovery, it's worth considering whether this deal was made out of necessity rather than value creation. AT&T spent billions of dollars over the years to develop its media business, and the plug was soon pulled.
Your Say: What You Said Should Go In The Oakdale Mall
AT&T is using its free cash to invest in its wireless and broadband businesses, and paying off debt, maintaining a healthy CAPEX and paying a big dividend has been a challenge for AT&T.
After this cycle, it's important to note that AT&T is in the same position that drove it to run the media business in the first place. What remains is a more-or-less business without a long-term catalyst. Management will continue to grow earnings at a low single-digit pace, and earnings growth will depend on low interest expenses to achieve mid-single-digit EPS growth. At this point, however, AT&T has significantly less to offer investors.
It makes investors ask, “Why buy AT&T stock?” It raises the question it is trying to answer. As a result, AT&T is now an undervalued stock with a solid (but unpublished) dividend yield. If we ignore valuations, long-term investors are looking for an annualized total return of 8%-9%, assuming 5% EPS growth.
On a cost basis, removing balance sheets keeps prices constant on an EV/EBITDA basis. With the stock trading below $40, the stock itself isn't really breaking out of historical limits.
Lies You've Been Told About Salt
With little room for much expansion, it becomes a question of whether AT&T should repeat itself at a higher price. Once again, AT&T's most exciting assets await. Without top-line growth, AT&T doesn't have enough for investors without a big dividend.
AT&T has made bold moves for such a large company over the years to move in and out of media. But it's hard to see the company doing better than it did a decade ago. AT&T will continue to decline, but it is now (rather) low growth and without the dividend that investors like. This begs the question, “Why buy AT&T stock?”
I provide direct insight into stocks and markets using fundamental analysis and common sense. – Bachelor in Business Administration with an emphasis on Financial Analysis. Over ten years of investing and monitoring the markets. – Wealth Insights Investor and Investment Writer. The content is not tailored to specific investment objectives, time horizons or risk tolerance. The content is for informational purposes only and is not a substitute for the advice of a qualified financial advisor. It should not be used as investment advice or to influence the decision of investors. The accuracy of the information is not guaranteed.
Disclosure: I/We do not hold any equity, option or similar positions in any of the companies mentioned and do not plan to take any such position within the next 72 hours. I wrote this article myself, it expresses my opinion. I do not receive any compensation for this (other than alpha search). I am not affiliated with any of the companies mentioned in this article.
What Car? October 2015 (digital)
If you have an ad blocker on, you won't be able to continue. Disable and update your ad blocker. In July, I visited Stanley Black & Decker (NYSE: SWK ) with early signs of listing problems appearing for investors. At that time, the stock was trading at $97.2 per share with a forward P/E of 11.2. I thought I was getting into a stock at the right time, but as we know today, I was too early because management had to cut its FY2022 guidance for the upcoming period. Today, I believe that the stock price is close to its lowest.
The forward P/E is 18.8 today and the forward 1Y PPS is 16.5, as forward EPS expectations were very low. One of my concerns is that SWK's revenue is not consistently depressed and at the end of the day, SWK has world-renowned brands that resonate with consumers as they continue to purchase products. For now, the stock may remain depressed and will most likely retrace its 52-week high of $70.2 (I believe we haven't seen a stock yet). look, maybe go. Most importantly, I average the dollar value of my investments. I have previously bought this stock in four transactions at $97.2, $86.8, $79.5, and $74.4. In total, I have collected about half of the total size in my portfolio. That said, the stock is still on my watch list if it shows new weakness.
Let's turn the clock back just one minute to February 1, 2022. Management today released Q4-2021 performance for SWK, including guidance for fiscal 2022. The company exited the 2021 financial year with high expectations. For 2022. The company expects organic growth of 7-8%, GAAP EPS of $10.10-10.70, adjusted EPS of $12.00-12.50 on approximately $2.0 billion in free cash flow. For FY2021, the company earned adjusted EPS of $10.48, so a significant increase in EPS is expected, better than expected revenue growth. It traded hands that day for $176 a share, a 52% premium over its current share price.
At the time, management was looking at strong demand, which reflected very positive expectations for 2022. This is unusual, as the company has delivered very strong financial results for 2020 and 2021, where it reported revenue of $2.0 billion, up from $1.4 billion to $1.6 billion for 2012. His income increased a lot. Overall, Wall Street has a consensus buy rating on SWK and Seeking Alpha Contributions has a consensus buy rating on the stock.
Seven Impossible Things Before Breakfast » Blog Archive » 7 Imp's 7 Kicks # 499: Featuringup And Coming Illustrator, Jessica Boehman
These hopes did not last
