The Time Warner (TWX) merger with AT&T (T) is not without risks, but it has the potential to transform AT&T into one of the most powerful companies in the market. The price drop is a great opportunity to get a high dividend company at a bargain price.
While the long-term debt of AT&T is undeniably high, the debt to earningsratio did not change significantly with the merger. With the merger, the company is in a much better position to reduce operating costs and leverage its assets. Even if management decides to cut dividends, in the long run, the dividend will be much higher than it is today. This investment is a once in a lifetime opportunity well worth the risk.
The Four Pillars of AT&T, plus a hidden asset
AT&T will be divided into four business. (Communications, Media, Advertising & Analytics, and International Operations). In terms of revenue, the Communications segment is the most significant one, while the company's growth will probably come from the Media and Analytics business.
