Rotten Tomato Stocks
No Result
View All Result
  • News
    Stocks Sink as Markets Brace for Big Week With Fed, Earnings

    Stocks Sink as Markets Brace for Big Week With Fed, Earnings

    Low-Cost Fashion Chain H&M Reports 4th-Quarter Loss

    Low-Cost Fashion Chain H&M Reports 4th-Quarter Loss

    Dow profit and sales fall short of estimates, aims to cut $1 billion in costs in 2023

    Dow profit and sales fall short of estimates, aims to cut $1 billion in costs in 2023

    Twitter Faces Lawsuits Over Unpaid Rent for US HQ, UK Office

    Twitter Faces Lawsuits Over Unpaid Rent for US HQ, UK Office

  • NYSE
    Johnson & Johnson, Chevron share losses lead Dow’s 261-point drop

    Johnson & Johnson, Chevron share losses lead Dow’s 261-point drop

    DaVita Inc. stock falls Monday, still outperforms market

    DaVita Inc. stock falls Monday, still outperforms market

    Marcus & Millichap (NYSE:MMI) Trading Down 6.3% on Analyst Downgrade

    Marcus & Millichap (NYSE:MMI) Trading Down 6.3% on Analyst Downgrade

    AmEx Profits Fall 9% as Customers Fall Behind on Payments

    AmEx Profits Fall 9% as Customers Fall Behind on Payments

  • NASDAQ
    Orchestra BioMed Down Almost 17% on Second Day of Nasdaq Trading

    Orchestra BioMed Down Almost 17% on Second Day of Nasdaq Trading

    Workhorse Group Inc. stock falls Monday, underperforms market

    Workhorse Group Inc. stock falls Monday, underperforms market

    World Acceptance (NASDAQ:WRLD) Shares Gap Down After Analyst Downgrade

    World Acceptance (NASDAQ:WRLD) Shares Gap Down After Analyst Downgrade

    Here’s Why Qorvo (NASDAQ:QRVO) Can Manage Its Debt Responsibly

    Here’s Why Qorvo (NASDAQ:QRVO) Can Manage Its Debt Responsibly

  • OTC
    China Eastern Airlines 3Q Loss Widens on Low Travel Demand

    China Eastern Airlines 3Q Loss Widens on Low Travel Demand

    Corus Entertainment 4Q Profit Falls

    Corus Entertainment 4Q Profit Falls

    Nintendo Co. Ltd. ADR falls Monday, still outperforms market

    Nintendo Co. Ltd. ADR falls Monday, still outperforms market

    Ocado Group PLC Revenue of Ocado Retail in Q3 Fell 10.6%

    Ocado Group PLC Revenue of Ocado Retail in Q3 Fell 10.6%

  • TSX
    US Seeks to Fine Air Canada $25.5 Million Over Slow Refunds

    US Seeks to Fine Air Canada $25.5 Million Over Slow Refunds

    S&P/TSX composite falls on drop in materials sector, loonie tops 81 cents US

    S&P/TSX composite falls on drop in materials sector, loonie tops 81 cents US

    Bitcoin Is Falling: Should You Buy the Dip?

    Bitcoin Is Falling: Should You Buy the Dip?

    CN Rail Stock Is So Undervalued That it’s Absurd

    CN Rail Stock Is So Undervalued That it’s Absurd

  • News
    Stocks Sink as Markets Brace for Big Week With Fed, Earnings

    Stocks Sink as Markets Brace for Big Week With Fed, Earnings

    Low-Cost Fashion Chain H&M Reports 4th-Quarter Loss

    Low-Cost Fashion Chain H&M Reports 4th-Quarter Loss

    Dow profit and sales fall short of estimates, aims to cut $1 billion in costs in 2023

    Dow profit and sales fall short of estimates, aims to cut $1 billion in costs in 2023

    Twitter Faces Lawsuits Over Unpaid Rent for US HQ, UK Office

    Twitter Faces Lawsuits Over Unpaid Rent for US HQ, UK Office

  • NYSE
    Johnson & Johnson, Chevron share losses lead Dow’s 261-point drop

    Johnson & Johnson, Chevron share losses lead Dow’s 261-point drop

    DaVita Inc. stock falls Monday, still outperforms market

    DaVita Inc. stock falls Monday, still outperforms market

    Marcus & Millichap (NYSE:MMI) Trading Down 6.3% on Analyst Downgrade

    Marcus & Millichap (NYSE:MMI) Trading Down 6.3% on Analyst Downgrade

    AmEx Profits Fall 9% as Customers Fall Behind on Payments

    AmEx Profits Fall 9% as Customers Fall Behind on Payments

  • NASDAQ
    Orchestra BioMed Down Almost 17% on Second Day of Nasdaq Trading

    Orchestra BioMed Down Almost 17% on Second Day of Nasdaq Trading

    Workhorse Group Inc. stock falls Monday, underperforms market

    Workhorse Group Inc. stock falls Monday, underperforms market

    World Acceptance (NASDAQ:WRLD) Shares Gap Down After Analyst Downgrade

    World Acceptance (NASDAQ:WRLD) Shares Gap Down After Analyst Downgrade

    Here’s Why Qorvo (NASDAQ:QRVO) Can Manage Its Debt Responsibly

    Here’s Why Qorvo (NASDAQ:QRVO) Can Manage Its Debt Responsibly

  • OTC
    China Eastern Airlines 3Q Loss Widens on Low Travel Demand

    China Eastern Airlines 3Q Loss Widens on Low Travel Demand

    Corus Entertainment 4Q Profit Falls

    Corus Entertainment 4Q Profit Falls

    Nintendo Co. Ltd. ADR falls Monday, still outperforms market

    Nintendo Co. Ltd. ADR falls Monday, still outperforms market

    Ocado Group PLC Revenue of Ocado Retail in Q3 Fell 10.6%

    Ocado Group PLC Revenue of Ocado Retail in Q3 Fell 10.6%

  • TSX
    US Seeks to Fine Air Canada $25.5 Million Over Slow Refunds

    US Seeks to Fine Air Canada $25.5 Million Over Slow Refunds

    S&P/TSX composite falls on drop in materials sector, loonie tops 81 cents US

    S&P/TSX composite falls on drop in materials sector, loonie tops 81 cents US

    Bitcoin Is Falling: Should You Buy the Dip?

    Bitcoin Is Falling: Should You Buy the Dip?

    CN Rail Stock Is So Undervalued That it’s Absurd

    CN Rail Stock Is So Undervalued That it’s Absurd

No Result
View All Result
Rotten Tomato Stocks
No Result
View All Result

AT&T stock heads for worst day in 11 months as future dividend cut viewed as ‘somewhat surprising’

Editorial Staff by Editorial Staff
May 18, 2021
0
AT&T stock heads for worst day in 11 months as future dividend cut viewed as ‘somewhat surprising’

AT&T will ‘resize’ its dividend after WarnerMedia spin is complete, a move at odds with ‘income focus of some shareholders,’ per an analyst

AT&T Inc. shares are headed for their worst single-day performance in almost a year as investors continue to digest the company’s decision to reshape its business yet again with a spinoff of WarnerMedia to Discovery Inc.

The move will allow AT&T T, -5.80% to refocus on its core telecommunications strengths—wireless and fiber—but the company is making other changes as well. Notably, the company disclosed that it would be “resizing” its dividend after the $43 billion deal closes as AT&T will seek to target a 40%-to-43% payout ratio on upward of $20 billion in free-cash flow.

Shares are off 5.8% in Tuesday afternoon trading and on pace for their biggest single-day percentage decline since June 11, 2020, when the shares dropped 6.1%. Though AT&T’s shares were up as much as 5.1% intraday Monday after the WarnerMedia deal was announced, they ultimately closed Monday’s session down 2.7%.

Chief Financial Officer Pascal Desroches said on an investor conference call Monday morning that AT&T is focused on “where can we deliver the most attractive returns to our shareholders” as the company thinks “investing additionally in our businesses is paramount.” He expects that the company is still “going to have a really healthy dividend” with a yield that would put it in the 95th percentile of dividend payers.

The dividend announcement was a “clear negative,” Raymond James analyst Frank Louthan IV wrote in a Monday afternoon note to clients. The company’s target implies a roughly 45% reduction in AT&T’s dividend relative to current levels, by his math.

“This deviates from previous commentary in which we viewed management as the ‘gold standard’ in maintaining the dividend as a sacrosanct tenet of its value proposition to shareholders,” Louthan wrote. “This about-face from the strategy, which was to maintain or grow the dividend at all costs, will likely linger in investors’ minds for many years.”

Louthan, who is bullish on AT&T’s stock with an outperform rating, noted that shareholders would at least be likely to see four more dividend payments at current levels since AT&T doesn’t expect the WarnerMedia deal to close until mid-2022.

At current prices, AT&T’s stock has the highest dividend yield among components of the S&P 500 index SPX, -0.85% at 7.04%.

AT&T shareholders will also get a stake in the combined company formed by WarnerMedia and Discovery DISCA, -1.60%, “so at least there is some compensation for the cut and the spinoff sets up the new company for a better long-term growth profile,” he wrote.

Truist Securities analyst Greg Miller referred to the dividend “reset” as “clearly a negative event” but one that he deemed “likely necessary to avoid far worse conditions at a later date.”

“Although the company reiterated the fact that it would be in the 95th percentile of all dividend payers with a ~4% yield (~7% prior to announced cut), when pairing this reduction with the anticipated tax rate hikes and increasing capital expenditures, we believe the payout ratio could be increasingly pressured after already dropping from our estimate of ~63% in 2022,” Miller continued in a Monday note to clients.

He has a hold rating and $30 price target on AT&T’s shares.

William Blair analyst Jim Breen called the dividend cut “somewhat surprising given the income focus of some shareholders.”

“However, we note, post-close, AT&T’s dividend yield will be in line with Verizon VZ, -1.31% …at around 4.5%, which makes sense given the companies will now look similar from a business perspective,” he wrote in a Tuesday note to clients. “We believe AT&T became too broad in focus over the last few years, which restricted its ability to run efficiently.”

In Breen’s view, the deal will put AT&T on healthier financial footing, giving the company more flexibility to invest in its 5G buildout. He has a market perform rating on the shares.

Related Posts

Johnson & Johnson, Chevron share losses lead Dow’s 261-point drop
NYSE

Johnson & Johnson, Chevron share losses lead Dow’s 261-point drop

January 31, 2023
DaVita Inc. stock falls Monday, still outperforms market
NYSE

DaVita Inc. stock falls Monday, still outperforms market

January 31, 2023
Marcus & Millichap (NYSE:MMI) Trading Down 6.3% on Analyst Downgrade
NYSE

Marcus & Millichap (NYSE:MMI) Trading Down 6.3% on Analyst Downgrade

January 31, 2023
AmEx Profits Fall 9% as Customers Fall Behind on Payments
NYSE

AmEx Profits Fall 9% as Customers Fall Behind on Payments

January 30, 2023
Load More
Next Post
Your Stock Market Crash Checklist: 10 Things to Do

Your Stock Market Crash Checklist: 10 Things to Do

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

I agree to the Terms & Conditions and Privacy Policy.

POPULAR NEWS

CNH Industrial (NYSE:CNHI) Use Of Debt Could Be Considered Risky

CNH Industrial (NYSE:CNHI) Use Of Debt Could Be Considered Risky

April 14, 2021
CN Rail Stock Is So Undervalued That it’s Absurd

CN Rail Stock Is So Undervalued That it’s Absurd

May 2, 2021
US Seeks to Fine Air Canada $25.5 Million Over Slow Refunds

US Seeks to Fine Air Canada $25.5 Million Over Slow Refunds

June 17, 2021
Ocado Group PLC Revenue of Ocado Retail in Q3 Fell 10.6%

Ocado Group PLC Revenue of Ocado Retail in Q3 Fell 10.6%

September 14, 2021
10 Warning Signs That Should Tell You “This Stock is in Trouble”

10 Warning Signs That Should Tell You “This Stock is in Trouble”

November 11, 2019

EDITOR'S PICK

IBM stock worst performer on Dow as Whitehurst steps down as president

IBM stock worst performer on Dow as Whitehurst steps down as president

July 5, 2021
Asda recalls three types of mince pies due to health and safety fear – ‘do not eat’

Asda recalls three types of mince pies due to health and safety fear – ‘do not eat’

December 11, 2022
Ross Stores Shares Tumble 17% on Declining 1Q Sales, 2Q Sales Forecast

Ross Stores Shares Tumble 17% on Declining 1Q Sales, 2Q Sales Forecast

May 20, 2022
KLA Corp. stock falls Tuesday, underperforms market

KLA Corp. stock falls Tuesday, underperforms market

February 2, 2022

Stay Updated

Get breaking news delivered straight into your inbox

Nothing in this publication should be considered as personalized financial advice. We are not licensed under securities laws to address your particular financial situation. No communication by our employees to you should be deemed as personalized financial advice. Please consult a licensed financial advisor before making any investment decision. This is a paid advertisement and is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. Rotten Tomato stocks is a wholly-owned subsidiary of Grainne Capital Limited.
While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.

Rotten Tomato Stocks cover the companies and markets that are declining, failing or headed for disaster. We help investors spot the down tends and recognize when something smells rotten.

RECENT POSTS

Stocks Sink as Markets Brace for Big Week With Fed, Earnings

Johnson & Johnson, Chevron share losses lead Dow’s 261-point drop

DaVita Inc. stock falls Monday, still outperforms market

POPULAR POSTS

Marcus & Millichap (NYSE:MMI) Trading Down 6.3% on Analyst Downgrade

Orchestra BioMed Down Almost 17% on Second Day of Nasdaq Trading

Workhorse Group Inc. stock falls Monday, underperforms market

© Copyright 2021 RottenTomatoStocks. All Rights Reserved 

Disclaimer | Privacy Policy

No Result
View All Result
  • HOME
  • NEWS
  • NYSE
  • NASDAQ
  • OTC
  • TSX

© 2021 RottenTomatoStocks.com

error: Content is protected !!
This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.