Why I Will Never Sell AT&T

AT&T (T) stock is cheap and pays a great dividend. Those two things force investors to take notice. Beyond that, though, is a strategic direction and corporate structure that has positioned AT&T stock for long-term success. That success spans well beyond this year, next year, or even five years from now, and is why I feel confident that AT&T stock will always remain in my portfolio as a core holding.

First off, if I am going to own a stock forever, I want a safety net of some sort. A dividend is good, and a yield of 5.6% is great, but being able to afford that dividend with room for even higher dividends is greatest of all. AT&T’s free cash flow is about to rise significantly due to the acquisition of DirecTV and two purchases in Mexico. Recently, AT&T guided for FCF of $4.5 billion in the third quarter, about $1 billion better than last year. At just 13 times next year’s free cash flow, AT&T stock is priced at a perfect entry point with a tremendous dividend to take advantage of these long-term opportunities, making AT&T stock the perfect buy, hold, and forget investment.

Source: InvestorPlace

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