Ray Dalio’s Bridgewater Associates is the largest hedge fund in the world, with over $123 billion in assets under management. Recently, the fund revealed to the United States Securities and Exchange Commission (SEC) which companies it bought and which it sold.
Bridgewater sold shares of Netflix, Broadcom, and Home Depot. But it did buy this dividend stock.
AT&T (NYSE: T)
AT&T (NYSE: T) is a holding company that provides telecommunication and technology services worldwide via its subsidiaries.
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Bridgewater Associates bought 1.98 million shares of AT&T at an average price of $15.9. The total investment is worth around $31 million, and it puts it among the smaller holdings at 0.2% of the fund’s portfolio.
Investing in AT&T comes with one of its perks: a massive dividend at 7.87% annually, which makes it a great addition to anyone who wants passive income on their portfolio.
AT&T recently reported its Q2 earnings, where it beat estimates for free cash flow. The company said it had achieved its $6 billion cost-cutting goal ahead of schedule and was now targeting another $2 billion-plus over the next 3 years.
To support the high dividend and service its debt, the company needs free cash flow and cost-cutting measures. However, AT&T is expected to produce $17 billion in free cash flow each year for the next three years, according to Wall Street estimates, which should put the company in a good position to keep the high dividend yield in the coming years.
Morningstar’s analyst equity report has put a fair value estimate on AT&T’s stock at $23. That’s a 63% difference from the current market price of $14.10.
AT&T stock technical analysis
AT&T currently trades near a strong support level of $14, which successfully held the price back in 2022. The stock looks heavily oversold at the moment, meaning we could see a bounce to $15 in the short term.
If the price breaks $15 and manages to hold there, we could see a slow grind back to $18 at some point in the coming months.
Regardless of what the future holds, AT&T has underperformed the S&P 500’s 15% return this year with a negative 24%.
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Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
