All good things come to an end. We are nearing the end of the long boondoggle induced by the US Federal Reserve’s stimulus measures. Combined with massive government spending and $ 120 billion a month in quantitative easing, liquidity never seemed to stop. Just like in 1999, who cares about valuations anyway? Well the Pied Piper needs to be paid, and we may have seen the start of that payout last week as the Nasdaq recorded the biggest four-day loss since February of last year.
Many on Wall Street continue to cite the so-called TINA conundrum (“there is no alternative”), as rates are still very low on a historic basis despite current and expected increases. The reality is they are right and stocks will remain the place to be for everyone except those with extremely low tolerance for risk.
What makes sense is to look to value, especially mid and large caps that pay consistent and reliable dividends. We sifted through our 24/7 Wall Street research database and found five great ideas for investors. It is important to remember that no analyst report should be used as the sole basis for any buy or sell decision.
It is a leading telecommunications and entertainment game. AT&T Inc. (NYSE: T) is America’s largest telecommunications company, providing wireless and wireline services to retail, corporate and wholesale customers. The company’s wireless network serves approximately 124 million mobile connections, with 77 million postpaid subscribers.
In a bid to reduce its significant leverage, AT&T agreed last year to sell a stake in its pay-TV unit to private equity firm TPG and carve out a niche in the ailing firm, removing the giant. telecommunications an expensive gamble on entertainment. The transaction moved the DirecTV and AT&T TV services to the United States into a new entity jointly managed by the new partners. AT&T retains a 70% stake in the company, while TPG pays $ 1.8 billion in cash for a 30% stake.
The company also separated Warner Media and merged it with Discovery. AT&T will reset its historic dividend down, which will go a long way to helping the company manage its cash flow. The new dividend payment is expected to be around $ 1.15, as there will likely be more shares outstanding at the time of the split. Based on Friday’s closing price, investors will still receive a very solid 4.30% dividend.
AT&T stock has been roughed up since the dividend cut and fallout announcement was announced, but the reality is it has incredible business and has done an amazing job reducing its massive debt and getting rid of non-performing assets. .
BofA Securities has a buy rating with a target price of $ 36. The consensus target is only $ 30.26 and shares closed at $ 26.29 on Friday.