The delisting may have injured the company’s pride; however, it has zero impact on T’s fundamentals. This conservative, low-risk, compelling investment has a utility-like status and a strong, attractive dividend (5.7 percent), which has been increased for 31 consecutive years. Earnings won’t explode, but they will grow modestly and steadily between 2 and 5 percent a year — and perhaps even better if management reaches its goal to improve net profit margins from 9.9 percent to 12.6 percent by 2019. Of course, the future will be even brighter if the $49 billion DirecTV deal is approved this summer by the Federal Communications Commission and the Justice Department. However, with or without the DirecTV deal, the analysts at Morningstar, Credit Suisse, Argus Financial Services and Standard & Poor’s currently have “buy” ratings on the stock. Some of the smart money on Wall Street believes that AT&T could trade between $43 and $48 in the coming few years, and the $1.88 dividend may grow to $2.25.
Volatile investment
I don’t have any opinion on the stocks of Antero Resources, Splunk, SunEdison and Whiting Petroleum. I’ve never heard of them, though they are among the most prominent portfolio holdings of ALPS’ U.S. Equity High Volatility Put Write Index Fund (HVPW-$23.70). HVPW writes out of the money put options on these and other portfolio issues. Management has been doing this since early 2013 and has earned some attractive premiums in a very strong market. But the guys who run this exchange-traded fund haven’t been tested in a down market, and I suspect that HVPW is a very volatile investment. Meanwhile, “ALPS” is either a mountain range in Europe or an abbreviation for autoimmune lymphoproliferative syndrome — the latter, I suspect, if the Dow goes into a funk and slumps 10 percent.
This delisting is an excellent opportunity for stockbrokers to recommend the sale of AT&T and generate fees. This is a commission business, and if a broker fails to buy or sell you something, his paychecks may come up short. I understand that, but this ALPS thing really takes the cupcake.