Att Stock A Good Buy

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Att Stock A Good Buy

AT&T Stock: Is It a Good Buy for Dividend Investors?

AT&T slashed its dividend back in 2022, and it drove away a lot of dividend investors. However, it appears that AT&T stock can be considered for a reliable dividend once again.

The financial profile of AT&T has improved a lot over the last few years. Analysts think AT&T is set to deliver strong financial growth in the next 3 years.

AT&T's Financial Situation Has Improved

If we look at the past, the dividend yield was slashed back in 2022. At that time, the company wanted to retain cash for reinvesting into the business. Also, the company wanted to use the money to repay its debt. It took AT&T a while, but the company's strategy has started to yield results again.

Today, AT&T is in a very good financial position. The leverage ratio was near 2.5x by the 2025 end. The recent quarter data shows it is near 2.7. So, AT&T is in a good spot to return the cash to sharehodlers in the form of a dividend. The company has also repurchased $5 billion worth of its shares.

So, in the next 3-5 years, we can expect a steady and growing dividend yield from AT&T. This year, AT&T is likely to have free cash flow of $18 billion. That would be an increase from last year's value of around $16.6 billion. By 2028, analysts think the free cash flow will be near $21 billion.

The availability of so much cash means dividend investors can start to trust AT&T stock again. Also, the continuous repurchase program is likely to send the AT&T share price higher in the coming years.

For now, it remains to be seen if AT&T will increase its dividend or not. But for now, AT&T stock is a safe option for those who want a stable dividend. Also, there's a good chance that AT&T's share price could appreciate in the coming years.

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