T-Mobile Plans to Pay a Dividend. Does That Make It the Best Buy Compared to Other Telecom Stocks?
Paying a dividend can be quite the commitment. Although it's discretionary, once a business starts paying a dividend, the expectation is that it will continue to pay that dividend. If dividend payouts stop, investors often take that as a sign that there are problems with the company and its profitability prospects.
For that reason, many growth-oriented businesses prefer share buybacks instead of dividends. In recent years, T-Mobile US (NASDAQ: TMUS) has been focused on growth; so, paying a dividend hasn't been part of its strategy before. That, however, is about to change.
Earlier this month, T-Mobile CEO Mike Sievert said that as part of the company's plan to provide shareholder returns, it is going to pay $3 billion in dividends over the course of a year. Investors should expect the first dividend declaration and payment to come before the end of 2023.
Source Fool.com
