AT&T’s Divestment of Media Properties, Refocusing on Cell and Broadband, Generates Bumper Returns
At face, there’s nothing sexy about getting data from point A to point B, but cell carrier AT&T is doing just fine, focusing on a seemingly pedestrian business. Not long ago, that wasn’t the case. In the decade prior, AT&T made big moves in media, buying pay-TV giant DirecTV and media powerhouse Time Warner. But as its losses weighed on the business, the company divested both businesses — and it’s now being rewarded for refocusing on what works.
- AT&T had its ups and downs for ten years during the acquisition and disposal of its media assets — but since the start of 2024, the company is up 36.2% despite facing data breaches and outages.
- Over the same period, DirecTV has been tied up after a failed merger with Dish, and Warner Bros. Discovery, parent of HBO, has lost half its value since its merger — talk about good timing.
Time to ATT-ack: Untethered by sagging assets, AT&T’s CEO John Stankey has outlined new goals for its two big businesses: wireless (where it’s the third-largest provider in the US) and broadband services. Both businesses grew in the single digits, but AT&T remains committed to its beefy $0.28 quarterly dividend — effectively offering a 4.72% yield at current prices. The company also plans to continue these big payments alongside $40B in share buybacks over the next few years. No wonder investors are picking up the phone.
