Divergent Capital
Private Investor & Writer, Capital-Light Businesses & Special Situations
Verizon is attractive as a source of passive dividend income. At a roughly $0.69 quarterly dividend, 10,000 shares would pay about $6,900 every three months, or about $27,600 a year. x.comÂ
Verizon and AT&T generate plenty of cash flow and can slow their spending if needed. Cell phones are widely used, and the carriers' metrics look fine. x.comÂ
Debt, costly spectrum auctions and bad capital allocation make AT&T, Verizon and T-Mobile long-term laggards. They may rebound, but cannot keep pace with the S&P 500 or even weaker safety stocks. T-Mobile's Sprint-led growth is over with higher leverage; AT&T cut its dividend and spent heavily on Warner, while Verizon flip-flopped on fiber. High yields do not compensate. If forced to choose, AST SpaceMobile is probably the better gamble since legacy carriers have more incentive to support it. … Show more
SpaceX's negative cost of capital gives it an advantage over AT&T and Verizon as it enters mobile telecom; neither incumbent has that funding position. x.comÂ
AT&T's dividend backed by free cash flow and buybacks could offer a place to hide if things get uglier. At ~9x 2026 EPS, it has a ~12% FCF yield, ~5% dividend yield and ~6-7% buyback yield. ~$2.8B in repurchases left under the 2026 target implies buying equal to ~6-7% of normal daily volume into year-end; its 5%+ dividend is backed by $18B+ in FCF. Starlink is a threat but seems overblown; the stock can get cheaper, yet AT&T diversifies exposure to new-paradigm bets such as SPCX. x.com x.comÂ
Large-cap value stocks should do well as the Fed starts a hiking cycle; BofA favors them because they have historically outperformed at this stage, and analysts expect three more hikes over 12 months. The US mega-caps with the highest Deep Value Scores, combining low multiples with high free-cash-flow yields, are Verizon 88, CVS Health 86, Pfizer 84, AT&T 84, Bristol Myers Squibb 82, ConocoPhillips 74, T-Mobile 74, Chevron 72, Altria 70 and Exxon Mobil 65. x.comÂ
AmpliTech fits the telecom buildout because mobile network operators can no longer rely mainly on 1990s-style cabling and must expand faster and more efficiently. It is a risky microcap at about $100 million in market cap, but very cheap compared with its peers, offering exposure to a secular theme with a wide margin of safety. The position follows research into its earnings calls and competitors. x.comÂ
AT&T could bounce after falling about 33% in roughly two months into a notable area, while it carries a 5.4% dividend yield. It is worth a trade over the next 3-6 months. x.comÂ