Raise your hand if at the beginning of 2021 you thought T would outperform the likes of AAPL .. AMZN .. GOOGL and MSFT in 2022, yet that is exactly what happened.
T .. up 5.88%
AAPL .. down 27.33%
MSFT .. down 28.85%
GOOGL .. down 39.69%
AMZN .. down 50.25%
When you look at the last Older Folk Portfolio update you will notice the T position being built up to just under a full position and neither AAPL, MSFT, GOOGL or MSFT were anywhere to be seen in the portfolio all year.
I will be adding more T in the coming weeks.
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AT&T
Telecom stock AT&T (T) is the third safe stock to buy with $3,000 in the new year. Inclusive of dividends paid, AT&T joins Johnson & Johnson in delivering a positive total return for its shareholders during the 2022 bear market.
To keep with the theme of this list (thus far), AT&T is supported by the fact that wireless access and smartphone ownership have evolved into necessities. This is to say, a weakening U.S. economy and historically high inflation haven’t sapped demand for wireless subscriptions or increased the churn rates of the major wireless providers. In short, telecom companies can expect steady operating cash flow, year in and year out.
In particular, AT&T is seeing a healthy tailwind from its wireless infrastructure investments, which are designed to support 5G download speeds. Since it had been about 10 years since major telecom providers upgraded their wireless infrastructure, we’ve been witnessing a strong consumer and enterprise device replacement cycle. AT&T recorded 5.6% wireless services revenue growth in the third quarter — its fastest year-over-year sales growth in more than a decade — and has recognized at least 200,000 AT&T Fiber net customer additions for 11 consecutive quarters.
The other big catalyst for AT&T was its spinoff of content arm Time Warner, which merged with Discovery to create Warner Bros. Discovery. When this merger completed in April, Warner Bros. Discovery assumed certain lots of debt previously held on AT&T’s balance sheet, and the merger also gave AT&T cash. The combined sum of this cash and debt assumption totaled a little over $40 billion. With greater financial flexibility, AT&T’s 6.1% yield remains rock solid.
Source: Motley Fool |
