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Ryan Reynolds Sells Mint Mobile for $1.35 Billion to T-Mobile
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Tag: Telecommunication Services
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AT&T stock moves higher after earnings as subscriber growth story continues
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Shares of AT&T Inc. were rising in premarket trading Wednesday after the company swung to a loss upon taking restructuring charges, but beat earnings expectations on an adjusted basis and showed continued subscriber growth in its fourth quarter.
The company posted a loss from continuing operations of $23.1 billion, or $3.20 a share, whereas it earned $5.2 billion, or 66 cents a share, a year-earlier. The loss includes $3.57 cents a share of non-cash impairment, abandonment, and restructuring charges, among other factors.
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11 high-yield dividend stocks that are Wall Street’s favorites for 2023
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Investors love dividend stocks but there are different ways to look at them, including various “quality” approaches. Today we are focusing on high yields.
A high dividend yield can be a warning that investors have lost confidence in a company’s ability to maintain its dividend payout. But there are always exceptions, some of which can be brought about by market events — some investors remain skeptical of energy stocks, for example, after so much pain before this year’s outstanding performance for the sector.
Below is a screen of stocks that have high dividend yields and are favored by analysts. The screen has no financial quality filters.
For investors who are interested in dividend stocks but wish to focus on quality and total returns, this recent look at the S&P Dividend Aristocrats (companies that have raised dividends consistently for many years) might be of interest. For those looking for income but also worried about dividend cuts, here is a list of stocks with dividend yields of at least 5% whose payouts are expected to be well-covered by free cash flow in 2023.
If you are looking for higher yields with moderate risk, you should at also learn about funds that use covered-call option strategies to enhance income.
Removing the filters for a high-yield dividend-stock screen
For a broad screen of stocks with high dividend yields that are favored by analysts, we began with the S&P Composite 1500 Index
SP1500,
+1.42% ,
which is made up of the S&P 500
SPX,
+1.42% ,
the S&P 400 Mid Cap Index
MID,
+1.48% ,
and the S&P 600 Small Cap Index
SML,
+1.49% .The S&P indexes exclude energy partnerships, so we added the 15 stocks held by the Alerian MLP ETF
AMLP,
+1.81%
to the list. Energy partnerships tend to have high distribution yields, in part because they pass most earnings through to investors. But they also can make tax preparation more complicated. They can also be volatile as oil
CL00,
+2.96%
CL00 and natural-gas
NG00,
+1.58%
prices swing.The S&P indexes also exclude business development companies, or BDCs, so we expanded our initial screen to include the 24 stocks held by the VanEck BDC income ETF
BIZD,
+0.76% .
BDCs are specialized leveraged lenders that make loans with high interest rates, mainly to middle-market companies. They often take equity stakes in the companies they lend to, for a venture-capital-type of investment style. The BDC space features several stocks with very high dividend yields, but is also known for volatility.You have been warned — this particular stock screen focuses only on high yields and favorable ratings among analysts working for brokerage firms. There is no look back at dividend cuts and no cash-flow analysis as featured in other dividend-stock articles. If you see anything of interest resulting from the screen, you need to do your own research to consider whether or not a long-term commitment to one or more of these companies is worth the risk as you seek high income.
The screen
Starting with the S&P Composite 1500 and the components of AMLP and BIZD, there are 68 stocks with dividend yields of at least 8%, according to data provided by FactSet.
Among the 68 companies, 55 made the first screen, because they are covered by at least five analysts polled by FactSet.
Among the 55 companies, 11 have “buy” or equivalent ratings among at least 70% of analysts.
Here they are, ranked by upside potential implied by analysts’ consensus price targets:
Company Ticker Dividend yield Share “buy” ratings Dec. 20 price Consensus price target Implied 12-month upside potential Energy Transfer LP ET,
+2.35% 9.08% 95% $11.68 $16.24 39% Enterprise Products Partners LP EPD,
+0.88% 8.12% 79% $23.39 $31.69 35% Barings BDC Inc. BBDC,
11.67% 86% $8.14 $10.75 32% Redwood Trust Inc. RWT,
+2.70% 13.45% 80% $6.84 $8.92 30% Crestwood Equity Partners LP CEQP,
+0.78% 9.75% 100% $26.86 $35.00 30% KKR Real Estate Finance Trust Inc. KREF,
+1.38% 11.90% 71% $14.45 $18.50 28% Owl Rock Capital Corp. ORCC,
+0.38% 11.21% 91% $11.78 $14.73 25% Sixth Street Specialty Lending Inc. TSLX,
+1.89% 10.48% 82% $17.18 $20.90 22% Oaktree Specialty Lending Corp. OCSL,
-0.37% 9.97% 100% $6.77 $7.75 14% Ares Capital Corp. ARCC,
+1.22% 10.45% 93% $18.38 $20.87 14% BlackRock TCP Capital Corp. TCPC,
+1.76% 10.25% 71.43% $12.49 $14.00 12% Source: FactSet One way to begin your own research into any company listed here is to click on the ticker for more information.
You should also read Tomi Kilgore’s detailed guide to the wealth of information available free on the MarketWatch quote page.
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20 dividend stocks with high yields that have become more attractive right now
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Income-seeking investors are looking at an opportunity to scoop up shares of real estate investment trusts. Stocks in that asset class have become more attractive as prices have fallen and cash flow is improving.
Below is a broad screen of REITs that have high dividend yields and are also expected to generate enough excess cash in 2023 to enable increases in dividend payouts.
REIT prices may turn a corner in 2023
REITs distribute most of their income to shareholders to maintain their tax-advantaged status. But the group is cyclical, with pressure on share prices when interest rates rise, as they have this year at an unprecedented scale. A slowing growth rate for the group may have also placed a drag on the stocks.
And now, with talk that the Federal Reserve may begin to temper its cycle of interest-rate increases, we may be nearing the time when REIT prices rise in anticipation of an eventual decline in interest rates. The market always looks ahead, which means long-term investors who have been waiting on the sidelines to buy higher-yielding income-oriented investments may have to make a move soon.
During an interview on Nov 28, James Bullard, president of the Federal Reserve Bank of St. Louis and a member of the Federal Open Market Committee, discussed the central bank’s cycle of interest-rate increases meant to reduce inflation.
When asked about the potential timing of the Fed’s “terminal rate” (the peak federal funds rate for this cycle), Bullard said: “Generally speaking, I have advocated that sooner is better, that you do want to get to the right level of the policy rate for the current data and the current situation.”
Fed’s Bullard says in MarketWatch interview that markets are underpricing the chance of still-higher rates
In August we published this guide to investing in REITs for income. Since the data for that article was pulled on Aug. 24, the S&P 500
SPX,
-0.29%
has declined 4% (despite a 10% rally from its 2022 closing low on Oct. 12), but the benchmark index’s real estate sector has declined 13%.REITs can be placed broadly into two categories. Mortgage REITs lend money to commercial or residential borrowers and/or invest in mortgage-backed securities, while equity REITs own property and lease it out.
The pressure on share prices can be greater for mortgage REITs, because the mortgage-lending business slows as interest rates rise. In this article we are focusing on equity REITs.
Industry numbers
The National Association of Real Estate Investment Trusts (Nareit) reported that third-quarter funds from operations (FFO) for U.S.-listed equity REITs were up 14% from a year earlier. To put that number in context, the year-over-year growth rate of quarterly FFO has been slowing — it was 35% a year ago. And the third-quarter FFO increase compares to a 23% increase in earnings per share for the S&P 500 from a year earlier, according to FactSet.
The NAREIT report breaks out numbers for 12 categories of equity REITs, and there is great variance in the growth numbers, as you can see here.
FFO is a non-GAAP measure that is commonly used to gauge REITs’ capacity for paying dividends. It adds amortization and depreciation (noncash items) back to earnings, while excluding gains on the sale of property. Adjusted funds from operations (AFFO) goes further, netting out expected capital expenditures to maintain the quality of property investments.
The slowing FFO growth numbers point to the importance of looking at REITs individually, to see if expected cash flow is sufficient to cover dividend payments.
Screen of high-yielding equity REITs
For 2022 through Nov. 28, the S&P 500 has declined 17%, while the real estate sector has fallen 27%, excluding dividends.
Over the very long term, through interest-rate cycles and the liquidity-driven bull market that ended this year, equity REITs have fared well, with an average annual return of 9.3% for 20 years, compared to an average return of 9.6% for the S&P 500, both with dividends reinvested, according to FactSet.
This performance might surprise some investors, when considering the REITs’ income focus and the S&P 500’s heavy weighting for rapidly growing technology companies.
For a broad screen of equity REITs, we began with the Russell 3000 Index
RUA,
-0.04% ,
which represents 98% of U.S. companies by market capitalization.We then narrowed the list to 119 equity REITs that are followed by at least five analysts covered by FactSet for which AFFO estimates are available.
If we divide the expected 2023 AFFO by the current share price, we have an estimated AFFO yield, which can be compared with the current dividend yield to see if there is expected “headroom” for dividend increases.
For example, if we look at Vornado Realty Trust
VNO,
+1.03% ,
the current dividend yield is 8.56%. Based on the consensus 2023 AFFO estimate among analysts polled by FactSet, the expected AFFO yield is only 7.25%. This doesn’t mean that Vornado will cut its dividend and it doesn’t even mean the company won’t raise its payout next year. But it might make it less likely to do so.Among the 119 equity REITs, 104 have expected 2023 AFFO headroom of at least 1.00%.
Here are the 20 equity REITs from our screen with the highest current dividend yields that have at least 1% expected AFFO headroom:
Company Ticker Dividend yield Estimated 2023 AFFO yield Estimated “headroom” Market cap. ($mil) Main concentration Brandywine Realty Trust BDN,
+2.12% 11.52% 12.82% 1.30% $1,132 Offices Sabra Health Care REIT Inc. SBRA,
+2.41% 9.70% 12.04% 2.34% $2,857 Health care Medical Properties Trust Inc. MPW,
+2.53% 9.18% 11.46% 2.29% $7,559 Health care SL Green Realty Corp. SLG,
+2.25% 9.16% 10.43% 1.28% $2,619 Offices Hudson Pacific Properties Inc. HPP,
+1.41% 9.12% 12.69% 3.57% $1,546 Offices Omega Healthcare Investors Inc. OHI,
+1.23% 9.05% 10.13% 1.08% $6,936 Health care Global Medical REIT Inc. GMRE,
+2.55% 8.75% 10.59% 1.84% $629 Health care Uniti Group Inc. UNIT,
+0.55% 8.30% 25.00% 16.70% $1,715 Communications infrastructure EPR Properties EPR,
+0.86% 8.19% 12.24% 4.05% $3,023 Leisure properties CTO Realty Growth Inc. CTO,
+2.22% 7.51% 9.34% 1.83% $381 Retail Highwoods Properties Inc. HIW,
+0.99% 6.95% 8.82% 1.86% $3,025 Offices National Health Investors Inc. NHI,
+2.59% 6.75% 8.32% 1.57% $2,313 Senior housing Douglas Emmett Inc. DEI,
+0.87% 6.74% 10.30% 3.55% $2,920 Offices Outfront Media Inc. OUT,
+0.89% 6.68% 11.74% 5.06% $2,950 Billboards Spirit Realty Capital Inc. SRC,
+1.15% 6.62% 9.07% 2.45% $5,595 Retail Broadstone Net Lease Inc. BNL,
-0.30% 6.61% 8.70% 2.08% $2,879 Industial Armada Hoffler Properties Inc. AHH,
+0.00% 6.38% 7.78% 1.41% $807 Offices Innovative Industrial Properties Inc. IIPR,
+1.42% 6.24% 7.53% 1.29% $3,226 Health care Simon Property Group Inc. SPG,
+1.03% 6.22% 9.55% 3.33% $37,847 Retail LTC Properties Inc. LTC,
+1.42% 5.99% 7.60% 1.60% $1,541 Senior housing Source: FactSet Click on the tickers for more about each company. You should read Tomi Kilgore’s detailed guide to the wealth of information for free on the MarketWatch quote page.
The list includes each REIT’s main property investment type. However, many REITs are highly diversified. The simplified categories on the table may not cover all of their investment properties.
Knowing what a REIT invests in is part of the research you should do on your own before buying any individual stock. For arbitrary examples, some investors may wish to steer clear of exposure to certain areas of retail or hotels, or they may favor health-care properties.
Largest REITs
Several of the REITs that passed the screen have relatively small market capitalizations. You might be curious to see how the most widely held REITs fared in the screen. So here’s another list of the 20 largest U.S. REITs among the 119 that passed the first cut, sorted by market cap as of Nov. 28:
Company Ticker Dividend yield Estimated 2023 AFFO yield Estimated “headroom” Market cap. ($mil) Main concentration Prologis Inc. PLD,
+1.63% 2.84% 4.36% 1.52% $102,886 Warehouses and logistics American Tower Corp. AMT,
+0.75% 2.66% 4.82% 2.16% $99,593 Communications infrastructure Equinix Inc. EQIX,
+0.80% 1.87% 4.79% 2.91% $61,317 Data centers Crown Castle Inc. CCI,
+0.93% 4.55% 5.42% 0.86% $59,553 Wireless Infrastructure Public Storage PSA,
+0.19% 2.77% 5.35% 2.57% $50,680 Self-storage Realty Income Corp. O,
+0.72% 4.82% 6.46% 1.64% $38,720 Retail Simon Property Group Inc. SPG,
+1.03% 6.22% 9.55% 3.33% $37,847 Retail VICI Properties Inc. VICI,
+0.81% 4.69% 6.21% 1.52% $32,013 Leisure properties SBA Communications Corp. Class A SBAC,
+0.27% 0.97% 4.33% 3.36% $31,662 Communications infrastructure Welltower Inc. WELL,
+3.06% 3.66% 4.76% 1.10% $31,489 Health care Digital Realty Trust Inc. DLR,
+0.63% 4.54% 6.18% 1.64% $30,903 Data centers Alexandria Real Estate Equities Inc. ARE,
+1.49% 3.17% 4.87% 1.70% $24,451 Offices AvalonBay Communities Inc. AVB,
+0.98% 3.78% 5.69% 1.90% $23,513 Multifamily residential Equity Residential EQR,
+1.46% 4.02% 5.36% 1.34% $23,503 Multifamily residential Extra Space Storage Inc. EXR,
+0.31% 3.93% 5.83% 1.90% $20,430 Self-storage Invitation Homes Inc. INVH,
+2.15% 2.84% 5.12% 2.28% $18,948 Single-family residental Mid-America Apartment Communities Inc. MAA,
+1.83% 3.16% 5.18% 2.02% $18,260 Multifamily residential Ventas Inc. VTR,
+2.22% 4.07% 5.95% 1.88% $17,660 Senior housing Sun Communities Inc. SUI,
+2.12% 2.51% 4.81% 2.30% $17,346 Multifamily residential Source: FactSet Simon Property Group Inc.
SPG,
+1.03%
is the only REIT to make both lists.[ad_2]
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AT&T stock surges toward best day since 2020 as earnings mark a ‘step forward’
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Shares of AT&T Inc. were up more than 9% in morning trading Thursday after the telecommunications company topped profit expectations and posted another quarter of sizable subscriber gains.
The company saw 708,000 postpaid phone net additions during the period, building on the 1.5 billion such net additions it saw during the first half of the year. Postpaid phone churn in the latest quarter was 0.84%.
The subscriber traction reflected “more of the same,” AT&T’s
T,
+9.01%
investor relations head Amir Rozwadowski told MarketWatch. While he said that some wireless competitors have been adjusting their promotions every few weeks, he added that AT&T has stayed more consistent with its strategy, something he saw as beneficial for consumers, who understand what the company is offering, and store associates, who don’t have to make major adjustments to their messaging.AT&T also added 338,000 net fiber subscribers in the third quarter.
Shares were up 9.5% in Wednesday morning trading and on track to log their best single-day performance since March 13, 2020, when they rose 10.0%. The stock is also on track to log its best post-earnings gain since at least 1997, according to Dow Jones Market Data.
Revenue came in at $30.0 billion, down from $31.3 billion a year before, though up from $29.1 billion in revenue for standalone AT&T when adjusting for business divestments. The FactSet consensus was $29.8 billion in revenue.
AT&T attributed the drop in headline revenue during the latest quarter to the divestment of its U.S. video business last July as well as lower business wireline revenue. Those trends were partially offset by higher mobility revenue.
AT&T expects growth in mobility service revenues at the “upper end” of the 4.5% to 5% range for the full year. It gave a target of 4.5% to 5% growth in its second-quarter report.
“Our results demonstrate that the strategy we put forward more than two years ago is the right strategy for not only the future of our business, but for the future of the communications industry,” Chief Executive John Stankey said on the company’s earnings call.
The current inflationary backdrop impacts both consumers and AT&T, and the company recently raised prices on some legacy plans recently as it dealt with its own inflationary costs. Despite financial pressures on consumers, Rozwadowski said that AT&T has seen consumers trade up to higher-tier plans more generally because they see more value in those plans.
While he said that AT&T was “certainly seeing signs of inflation across our business,” he also emphasized that consumers seem to have a strong appreciation for connectivity services as they evaluate their expenses. “You need phone and broadband probably more now than in the last recession,” Rozwadowski said.
AT&T executives highlighted last quarter that some consumers were taking a bit longer to pay their bills, though they ultimately were still paying them. The company is “not seeing any material change relative to what we saw last quarter,” Rozwadowski said, as customer payment cycles are holding steady at pre-pandemic levels.
The company posted third-quarter income from continuing operations of $6.3 billion, or 79 cents a share, compared with $5.0 billion, or 63 cents a share, in the year-prior quarter.
After adjustments for actuarial gains on benefit plans and some other factors, AT&T notched 68 cents a share in earnings from continuing operations, up from 66 cents a share a year earlier, and also above the 62 cents a share in earnings from continuing operations for standalone AT&T during that year-ago period. The standalone number accounts for the fact that the company divested its U.S. video business last summer.
Analysts tracked by FactSet were modeling 61 cents a share in adjusted earnings for AT&T’s third quarter.
Citi Research analyst Michael Rollins called AT&T’s latest earnings a “step forward,” highlighting that they “reflect a better balance of profitability relative to its revenue growth.”
“Results show that AT&T remains highly-competitive in wireless, while showing forward progress on improving fiber net adds with its expanding footprint,” he continued in a note to clients.
AT&T generated $3.8 billion in free-cash flow from continuing operations during the September quarter, and Chief Financial Officer Pascal Desroches shared on the earnings call that AT&T felt “good about our line of sight to achieving our free-cash flow target in the $14 billion range for the year.”
Rozwadowski said that the company was focused on putting cash back into the network.
“The business is generating a healthy amount of cash,” he said, and by investing that money in network improvements, AT&T hopes to achieve a “flywheel effect” since an enhanced network can help the company retain customers and convince them to pay up for more expensive plans.
Desroches added on the earnings call that AT&T was “very comfortable with our cash levels after paying our dividend commitment” and said that “this should only increase in future years as we expect cash conversion to improve from here.”
The company models adjusted earnings per share from continuing operations of “$2.50 or higher” for the full year, while analysts tracked by FactSet were looking for $2.53.
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AT&T stock gains after earnings beat, driven by continued subscriber rush
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Shares of AT&T Inc. were up 2% in premarket trading Thursday after the telecommunications company topped profit expectations for its latest quarter.
The company posted third-quarter income from continuing operations of $6.3 billion, or 79 cents a share, compared with $5.0 billion, or 63 cents a share, in the year-prior quarter.
After adjustments for actuarial gains on benefit plans and some other factors, AT&T
T,
-0.38%
notched 68 cents a share in earnings from continuing operations, up from 66 cents a share a year earlier, and alone above the 62 cents a share in earnings from continuing operations for standalone AT&T during that year-ago period. The standalone number accounts for the fact that the company divested its U.S. video business last summer.Analysts tracked by FactSet were modeling 61 cents a share in adjusted earnings for AT&T’s third quarter.
Revenue came in at $30.0 billion, down from $31.3 billion a year before, though up from $29.1 billion in revenue for standalone AT&T. The FactSet consensus was for $29.8 billion in revenue.
AT&T attributed the drop in headline revenue during the latest quarter to the divestment of its U.S. video business last July as well as lower business wireline revenue. Those trends were partially offset by higher mobility revenue.
The company saw 708,000 postpaid phone net additions during the period, while postpaid phone churn was 0.84%.
AT&T expects growth in mobility service revenues at the “upper end” of the 4.5% to 5% range for the full year. It gave a target of 4.5% to 5% growth in its second-quarter report. The company also models adjusted earnings per share from continuing operations of “$2.50 or higher” for the full year, while analysts tracked by FactSet were looking for $2.53.
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