The WarnerMedia-Discovery Merger Is Bad for Income Investors
If you read all the way through AT&T's (NYSE: T) press release announcing the merger between WarnerMedia and Discovery Communications (NASDAQ: DISC.A) (NASDAQ: DISCK), you'll eventually come to an outlook for AT&T's financial profile following the spinoff. The long and short of it is that AT&T's dividend, which has climbed for 34 consecutive years, may get a haircut.
Image source: AT&T.
AT&T said it expects to make annual dividend payments totaling 40% to 43% of free cash flow following the close of the WarnerMedia-Discovery deal. It expects annual free cash flow of about $20 billion immediately following the spinoff, which would put its total payments around $8 billion to $8.6 billion.
Source Fool.com
