AT&T’s Dividend-Loving Investors Are Dialing the Wrong Number

AT&T lowered its forecast for 2022 free cash flow, which funds its $8 billion dividend, for the second time just this year in July. Photo: Anthony Behar/Sipa/associated press

AT&T income-hungry shareholders should have seen it coming.

In April last year, a month before announcing the spinoff of its media division to shareholders in the form of shares of a 71% stake in the newly created Warner Bros. Discovery Chief Executive Officer John Stankey assured investors that “our deliberate capital-allocation plan allowed us to invest and sustain our dividend at current levels, which we believe is attractive.” He didn’t mention any increase. AT&T’s eventual failure to raise the dividend in 2021 broke a 34-year streak and saw it booted out of the vaunted S&P 500 Dividend Aristocrats Index.

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