Dividend Stocks: AT&T and Hershey Positioning for Growth Amid Challenges

High-yield dividend stocks like AT&T and Hershey face distinct challenges yet show solid growth potential. Investors eye their long-term dividend sustainability and potential share price appreciation.

Date: 18-04-2025

AI Rating: 7

**Earnings Per Share (EPS)**
The report discusses Hershey’s expected adjusted earnings per share for 2025, projected to be $6.10, down from $9.37 in 2024. This decline is concerning but still within a range that supports its quarterly dividend of $1.37, showcasing the company's commitment to rewarding shareholders while managing fiscal challenges.

**Free Cash Flow (FCF)**
AT&T’s strong focus on maintaining sustainable free cash flow is a proactive measure that underpins its ability to support a high dividend yield. The expectation to report $16 billion in free cash flow for 2025 suggests solid operational management, which could positively affect stock performance as it indicates financial stability.

**Profit Margins**
While the report does not provide direct metrics on profit margins, it emphasizes AT&T’s strategic maneuvers, such as reducing debt and focusing on fiber internet, aiming to convert operational efficiencies into improved margins over time. Hershey's efforts to achieve $350 million in cost savings also imply plans to enhance its operating margins amidst the pressure from high cocoa prices; thus this aspect cannot be overlooked.

Both companies demonstrate resilience and adaptability in response to industry pressures. Hershey's acknowledgment of high cocoa costs, alongside its strong historical dividend payments and strategic investments, may mitigate short-term volatility in stock price. On the other hand, AT&T's successful recovery post-dividend cut, coupled with an improved financial position, makes it an attractive pick for income-focused investors in the near term, despite potential competition and market pressures.

**Overall Outlook**
For investors looking at a holding period of 1 to 3 months, both AT&T and Hershey could present attractive opportunities with their respective dividend yields capabilities and growth initiatives. Investors should weigh the short-term challenges against the long-term dividend and cash flow potential that both stocks offer.

Stocks: T HSY