Telecom giant AT&T (NYSE:T) released its first-quarter results last week for the period ending March 31. It was a positive performance which resulted in a bump in the company's share price. Sales during the period grew 2.7% year over year and adjusted per-share earnings of $0.86 were also up by 2.4%.
One of the key numbers that is likely important to investors is the growth of the company's streaming services. As of the end of Q1, its domestic HBO and HBO Max subscriptions totaled 44.2 million, up over 11 million from a year ago. The service is showing strength even as there is a growing number of streaming options for consumers.
Another positive for the company was that its free cash flow of $5.9 billion grew by an impressive 51%. This is important for income investors because it can ease concerns over AT&T's high dividend yield, which today sits at 6.6%. But with the dividend payout ratio at 63.5%, there is plenty of room for the company to continue making those payments.
Lastly, there was also AT&T's outlook for 2021 which was stable yet positive. The company projects that its consolidated revenue will grow at around 1%. And while that isn't a terribly high growth rate, given that the year is still heavily impacted by the pandemic, it's not a bad result for the company.
AT&T's business looks strong and with it able to grow its new HBO Max service without impacting its dividend, it can potentially give investors the best of both worlds – long-term growth and recurring income.
