AT&T Stock - is AT&T's Dividend in Trouble from AT&T's Debt - $T - AT&T Debt Problem | Summary and Q&A

TL;DR

Jimmy delves into AT&T's debt, assuring stable ratings and manageable payments for dividends.

Key Insights

• ☠️ AT&T's debt, though significant, is rated stable by major agencies, ensuring manageable interest rates.
• 😚 The corporation's debt is substantial, close to its market cap, creating a financial challenge that needs careful management.
• ☠️ Despite rising interest rates, AT&T's weighted average rate and long maturities secure dividend payments for the near future.
• 📔 AT&T's earnings cover interest expenses, indicating sufficient profitability to manage debt obligations.
• 🌱 Management plans to reduce debt levels by 2022, further securing the corporation's financial stability.
• ❓ Investors may have varied perspectives on AT&T's debt, but its current financial outlook seems stable and manageable.
• 🥶 AT&T's cautious approach to debt management and commitment to free cash flow bode well for its financial health and dividend payments.

Transcript

Hey YouTube. I'm Jimmy. So in my last video I walk through my analysis of AT&T stock and in doing my research I took a look at AT&T debt and although it's a lot of debt I didn't see too much of a problem with it and much to my surprise I got quite a few comments in that video saying that I should talked more about AT&T's debt. So that's what I'm go... Read More

Questions & Answers

Q: How do major rating agencies view AT&T's debt?

Fitch rates AT&T highest for investment grade, with Moody's and S&P at triple B level, all with a stable outlook, indicating minimal change soon.

Q: How does AT&T's debt compare to its market cap?

AT&T's debt, around $185 billion, almost matches its market cap, signifying a significant financial obligation for the corporation.

Q: Can rising interest rates threaten AT&T's dividend?

While interest rates rise slowly, AT&T's manageable debt structure, long maturities, and healthy earnings coverage suggest dividend safety for now.

Q: How does AT&T plan to handle its debt?

AT&T aims to reduce debt levels by 2022 through free cash flow and asset sales, with prudent management ensuring manageable interest and dividend payments.

Summary & Key Takeaways

• Jimmy revisits AT&T's bond ratings and outlook, indicating stability and manageable debt conditions.

• He details AT&T's $185 billion debt, highlighting its spread and manageable interest rates.

• AT&T's earnings cover interest expenses, with plans to reduce debt levels, ensuring dividend payments' manageability.