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AT&T Stock: Valuation, Dividend and Risks - A look behind the scenes
AT&T shares are considered a defensive and large company in the USA that traditionally pays out a high dividend. The stock is currently at a historically low level with a price-earnings ratio of 6.55. But the cheap valuation and high dividend raise questions about whether it is a bargain or a value trap. There are various risks that weigh on the telecommunications giant. Rising interest rates place a direct burden on dividend stocks. The recently increased interest rates on ten-year US government bonds are increasing investors' demands on risky dividend payers. A dividend yield of 7% corresponds to a risk premium of just 2%. In addition …
AT&T Stock: Valuation, Dividend and Risks - A look behind the scenes
AT&T shares are considered a defensive and large company in the USA that traditionally pays out a high dividend. The stock is currently at a historically low level with a price-earnings ratio of 6.55. But the cheap valuation and high dividend raise questions about whether it is a bargain or a value trap. There are various risks that weigh on the telecommunications giant. Rising interest rates place a direct burden on dividend stocks. The recently increased interest rates on ten-year US government bonds are increasing investors' demands on risky dividend payers. A dividend yield of 7% corresponds to a risk premium of just 2%. In addition, AT&T has a growth problem and suffers from inflation. A further risk lies in the controversial discussion about laid lead cables and possible lawsuits for violating environmental regulations. Overall, AT&T shares remain an interesting but also risky investment opportunity. Investors should keep an eye on the changing interest rate environment and the risks specific to the telecommunications sector.
Source: According to a report by www.aktienwelt360.de
Read the source article at www.aktienwelt360.de