According to This Critical Number, AT&T's 4%-Yielding Dividend is Now on Rock-Solid Ground

There have been a lot of questions surrounding AT&T's (NYSE: T) dividend in recent years. The telecom giant already cut its payout by nearly 50% in 2022 to retain additional cash for debt reduction and to reinvest in expanding its fiber and 5G networks. Despite that cut, its leverage ratio remained elevated, causing concerns that another cut could be forthcoming. Those worries should disappear now that AT&T has finally reached its target leverage ratio. It has the flexibility to start returning more cash to investors, which it initially plans to do by repurchasing shares. That also means the company's more than 4%-yielding dividend is on rock-solid ground.AT&T has been following a well-defined capital allocation strategy. The telecom company has been using its strong cash flow to invest heavily in growing its 5G and fiber networks while also maintaining its attractive dividend. It has been using any remaining excess free cash flow to repay debt, aiming to get its leverage ratio down to the 2.5 range. Continue readingWeiter zum vollständigen Artikel bei MotleyFool Weiter zum vollständigen Artikel bei MotleyFool