The Dividend Mailbox®

Telecom & Tobacco: Analyzing the Legal Liability That Could Limit Returns


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Even though dividend growth stocks typically have a high degree of predictability, that doesn’t mean you can’t end up with surprises. Outside dividend cuts, some of the most significant surprises can come from legal liability - often arising from the distant past. Companies routinely face challenges in the courtroom and are well-equipped to handle their cases, but occasionally they are forced to cut a check with a lot of zeros. The problem for investors is that there is no quantifiable way to know what legal liabilities might be lingering out there.

 

This episode is packed with specific companies as Greg dives into two stocks from the tobacco industry and two from the telecom sector. He examines the legal history of British-American Tabacco ($BTI) and Altria ($MO), alongside the potential future liability of AT&T ($T) and Verizon ($VZ). In doing so, he also breaks down their performance as companies and gives you a snapshot of how we analyze dividend growth candidates. 

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Disclaimer: Past performance does not guarantee future results. This episode is for educational purposes only and is not investment advice.

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The Dividend Mailbox®By Greg Denewiler

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