For a long time, AT&T, Inc. (NYSE:T) has maintained its position as a dividend aristocrat, having raised its dividend for 34 straight years. However, investors might begin to develop fears if that will continue, especially considering that its debt is mounting to past $175 billion. Nonetheless, the success of HBO’s Game of Thrones and the launching of WarnerMedia streaming service is likely to prop the business in the longer term.
Upcoming streaming service
Video streaming is one of the markets which are catching momentum currently. The service is revolutionizing how people consume data and video products. A key driver of the demand for video streaming is convenience. Notably, consumers can access the video content anywhere through any device and at any time.
As such, the service is fueling demand for data, smartphones and mobile subscriptions. Market insights indicate that revenue from live video streaming will grow at 18.9% CAGR between 2018 and 20128. By 2028, subscription-based revenue model will amount to over 51.5% of the entire market. Clearly, AT&T’s launch of WarnerMedia will leverage this growth opportunity to generate more revenue.
Foray into the 5G landscape
On the year-to-date basis, the company’s share price has been fluctuating within a range of $3.00. According to investors, this might not be good news since it is uncertain what direction the stock would take. However, Randall L. Stephenson, AT&T Inc., Chairman, CEO & President recently said that the company is in the process of rolling out the hardware for 5G network. This is expected to drive up revenue considering the immense growth opportunity for the new generation of high-speed internet connection.
Further, the company is likely to initiate a share buyback program which will positive affect the EPS value. The CEO suggested that the company might retire some of its outstanding stock in 2020 as well as work towards debt paydown. If AT&T comes through with the plan, investors are likely to earn more from the annual dividend payout. During the last dividend payout, the company spend $3.7 billion.
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