Is AT&T Still a Great Dividend Stock?
With a deal to merge WarnerMedia with Discovery (NASDAQ: DISCA)(NASDAQ: DISCK), telecom giant AT&T (NYSE: T) has completed a costly round trip into and out of the media business. AT&T bought satellite TV provider DIRECTV in a $49 billion deal back in 2014, following that up a few years later with an $85 billion deal for Time Warner. By the time the Time Warner deal closed, AT&T had a whopping $180 billion of debt on its balance sheet.
The DIRECTV acquisition was an unmitigated disaster. The company shed pay TV subscribers for years before finally selling a minority stake in the business at a valuation far below what it paid. The Time Warner acquisition brought some valuable assets to AT&T, notably HBO, but combining the two companies never made all that much sense.
The deal with Discovery will turn AT&T back into a telecom company. AT&T will receive $43 billion in the form of cash, debt securities, and the retention of WarnerMedia's debt, while AT&T shareholders will own 71% of the new media company.
Source Fool.com
