Buy This Beaten-Down High-Yield Dividend Stock Before It's Too Late
The stock market has slowly started to come to its senses about telecom giant AT (NYSE: T). While the stock is still down significantly from its all-time high, shares have surged around 25% since they bottomed out in mid-2023.
Even after this rally, it's clear that a cloud of pessimism continues to hover over the stock. AT has a market capitalization of around $120 billion, and the company expects to generate between $17 billion and $18 billion of free cash flow this year. AT the midpoint of that range, AT stock trades for less than 7 times free cash flow.
The stock also looks inexpensive based on earnings. AT expects to report adjusted earnings per share between $2.15 and $2.25 in 2024, a number that will be reduced by an increase in depreciation and a few other items. The company's decision to invest $14 billion in Open RAN technology meant to transform its network requires it to depreciate existing equipment at a quicker rate, which will hurt earnings through 2026. Even so, at stock trades for less than 8 times the midpoint of its adjusted earnings guidance.
Source Fool.com
