T-Mobile:At&T
As long as AT&T has the dividend, it’s easy to forgive some of its other shortcomings. Did you see that dividend?So while not being able to buy T-Mobile would be a blow, it’s not significant enough to cause any questions about the safety of the dividend.Comcast (CMCSA, Fortune 500), DirecTV (DTV, Fortune 500) and other broadband video providers making life more difficult for the telecoms? Have I mentioned that Ma Bell pays a ginormous dividend?
Friday was the biggest sales day ever for the line of Kindle e-readers and tablets, with customers buying four times as many of the devices as they did last year, Amazon said. “In addition, we’re seeing a lot of customers buying multiple Kindles — one for themselves and others as gifts,” said Amazon vice president Dave Limp. “We expect this trend to continue on Cyber Monday and through the holiday shopping season.”But a stock that goes nowhere can still get you a 6% return thanks to the yield.
“Recent events have to make you take a fresh look at things. This is another hurdle,” said Joe Bonner, an analyst with Argus Research in New York. “But the dividend is very juicy and AT&T’s cash flow is not in any danger right now. You’d have to extrapolate far in the future before that happens.” No more Apple (AAPL, Fortune 500) iPhone exclusivity? Look at the dividend. Landline business continues to wither away?That’s not bad in any market, let alone one as rocky as this.
The Kindle Fire is smaller and less powerful than the iPad but, at $199, sells for $300 less than the most basic iPad 2.For existing AT&T shareholders, it’s no secret that the company is not an earnings momentum story. AT&T also trades at a discount to Verizon — which admittedly has better growth prospects. Ma Bell is currently at about 11 times 2012 earnings estimates while Verizon is valued at 14 times next year’s profit forecasts.
Analysts are forecasting annual profit growth of just 3% a year, on average, for the next few years. Online sales were up 39.3% on Thanksgiving Day and 24.3% on Black Friday compared to the same days last year, according to IBM’s Coremetrics, which tracks real-time data from 500 retailers.So there may be a (pardon the telecom pun) disconnect here — especially since the T-Mobile purchase was not a make-or-break deal for the company. AT&T still has more than 100 million wireless subscribers.
