The Pros and Cons of Investing in AT&T

Venerable telecom giant AT&T (NYSE: T) has been a favorite among income investors for years thanks to its high-yield dividend. But the company is undergoing a multiyear transformation, which includes an impending dividend cut.

The dividend reduction is necessary. AT&T became mired in massive debt when it made acquisitions to create an entertainment empire in the years before the pandemic. These actions put the company on a dangerous financial path at a time when it faced substantial capital expenditures to implement its 5G network.

When John Stankey took over as CEO in 2020, he took steps to restore AT&T's financial health, which included cutting the dividend and unwinding the company's media acquisitions. Before deciding to invest in AT&T, it's best to understand how these changes offer both wins and downsides for investors.

Source Fool.com