Dividend yield is not an important factor in my version of value investing. My focus is on total return. “Chasing yield” is a common investing error. Promising an extra 200 basis points in yield is the source of more investment frauds, than all other fraud sources combined. I think the recent crypto frauds fit in this category. I stress valuation first, with yield a nice extra if you can find it.
Don't trash the current AT&T too much for past errors - the dreamers are gone and the financial guys are having a field-day culling and returning to the core business. It's the only wireless business that's growing (customers, connections, and profit margin), they turned off 3G systems, they are turning off copper lines, selling non-core assets, rationalizing real estate. That's pulling $6 billion in cost out of the company (about $3.5b so far) and retiring debt. Whole company is <8x EBITDA of only wireless. You get everything else for free. Including broadband which is hitting the inflection points were adding incremental customers is much more profitable (no additional infrastructure needed). that is supposed to be about $10-12 billion in EBITDA within a few years. Stock is $19.50 with wireless at <8x, Broadband at 8x becomes over $13/share in 2-3 years, Debt falls another $30b by then transferring value to the stock of $4, Another $2.5b in cost reduction at 6x is another $2. Business customers are worth something, historically that's been $10b in EBITDA - call it $6b at 5x is another $4 per share.
Don't trash the current AT&T too much for past errors - the dreamers are gone and the financial guys are having a field-day culling and returning to the core business. It's the only wireless business that's growing (customers, connections, and profit margin), they turned off 3G systems, they are turning off copper lines, selling non-core assets, rationalizing real estate. That's pulling $6 billion in cost out of the company (about $3.5b so far) and retiring debt. Whole company is <8x EBITDA of only wireless. You get everything else for free. Including broadband which is hitting the inflection points were adding incremental customers is much more profitable (no additional infrastructure needed). that is supposed to be about $10-12 billion in EBITDA within a few years. Stock is $19.50 with wireless at <8x, Broadband at 8x becomes over $13/share in 2-3 years, Debt falls another $30b by then transferring value to the stock of $4, Another $2.5b in cost reduction at 6x is another $2. Business customers are worth something, historically that's been $10b in EBITDA - call it $6b at 5x is another $4 per share.