AT&T and Realty Income: A Favorable Outlook for Investors

Investors eye Realty Income and AT&T as dividends shine again. As interest rates decline, both companies could see stock prices rising amid solid operational growth.

Date: 02-02-2025

AI Rating: 7

Earnings Per Share (EPS): The report indicates that AT&T expects an adjusted earnings per share (excluding DirecTV) to be between $1.97 and $2.07 for 2025. This projection shows positive growth potential, indicating that AT&T is likely to continue its path of financial recovery.

Free Cash Flow (FCF): AT&T's free cash flow for 2023 increased by 19% to $16.8 billion, and is expected to rise further to $17.6 billion in 2024. This growth significantly exceeds their dividend payments, which underlines a solid financial foundation and suggests the ability to sustain and potentially increase dividends in the future.

Market Conditions: The analysis highlights how both companies were previously impacted by rising interest rates, leading to a slump in 2023. However, as interest rates are on a decline, investor interest is shifting back towards these dividend stocks, positively affecting their stock prices. The decline in interest rates improves the appeal of high-yielding dividend stocks like Realty Income and AT&T over traditional fixed-income investments.

Overall, the report presents a favorable outlook for both Realty Income and AT&T. The expectation that AT&T can maintain strong growth in its core businesses, coupled with its healthy free cash flow, and Realty Income's stability and dividend history, positions these companies well for income-focused investors looking for potential price appreciation and steady dividends.

Stocks: O T