Telecom stocks are often reliable income investments to own, but investors aren't so sure that's the case with AT (NYSE: T). The stock yields 7.6% right now, as its share price has fallen 19% this year, hitting new lows along the way.

Things have gone from bad to worse this month because there are now concerns that the company has many lead-covered cables it may need to clean up. There's also the potential for litigation to arise from these issues. Does this make AT's dividend too risky, or have investors overreacted to these developments?

On a quarterly basis, AT pays approximately $2 billion in dividends. For 2023, the company projects that it will generate $16 billion in free cash flow, which is $2 billion more than it produced in the previous year. Assuming it can deliver on that target, that would mean the telecom is paying out roughly half of its free cash flow as dividends, which would be a sustainable amount.

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Source Fool.com