AT&T's Incoming CEO John Stankey Is Right: The Dividend Is Well Protected

It would have been easy to dismiss as typical corporate cheerleading. What else is an incoming CEO going to say other than the company's future looks bright?

When AT&T (NYSE: T) CEO-elect John Stankey suggested the company could "comfortably cover its dividend" at the same time it continues to whittle down its debt, though, he wasn't just blowing smoke. Despite the stock's poor performance since its 2016 peak, AT&T's results have remained solid -- not necessarily impressive, but solid. There's plenty of income left over not just to pay the dividend and pay off debt, but also to continue investing in things like 5G and even entertainment for its Warner Media arm.

AT&T is a lot of things, but a growth machine isn't one of them. Last fiscal year's top-line growth of 6% was a bit better than average, and the resulting 7% year-over-year growth in operating income was hardly a show-stopper.