Is AT&T's Dividend Safe?
The biggest disappointment from AT's (NYSE: T) first-quarter earnings report was its dismal free cash flow.
Free cash flow is extremely important for AT investors, many of whom look for the stock to continually throw off cash in the form of its high-yielding dividend. But after the wireless carrier generated just $1 billion in free cash flow in the first quarter, the health of its dividend may be called into question.
AT's first-quarter free cash flow was so small, it had to dip into its cash reserves to meet its dividend payment. AT paid out $2.1 billion in dividends last quarter. As a result, it ended the first quarter with about $900 million less in cash and equivalents than it started it with. It also added about $1.6 billion in debt on top of the $135.9 billion it ended 2022 with.
Source Fool.com
