1. AT&T
One of my smallest stock positions going into this week was AT&T. With the telco giant’s latest financial results announced on Wednesday, it seemed like an opportune time to increase my stake.
While AT&T’s 6.5% yield was attractive, the disappointing report raised concerns. Despite a 2% revenue increase to $32 billion, driven by its flagship mobility business and other segments, a 10% decline in its business wireline segment led to adjusted earnings falling below expectations. Nevertheless, AT&T aims to become a lean and profitable company, generating significant free cash flow. Its focus on 5G and fiber connectivity businesses may drive future growth.
Despite the less-than-ideal report, I still believe buying AT&T was the right move.
2. Leggett & Platt
Although Leggett & Platt exhibits several red flags, such as declining revenue and profits, I decided to invest in this stock trading near its 52-week low. The company specializes in manufacturing components for bedding, furniture, and flooring solutions. It also has a smaller business segment serving the automotive industry. While the housing market slump affected demand, a recovery is possible if mortgage rates continue to drop.
Leggett & Platt’s impressive 7.9% yield, along with its long history of dividend growth for 52 consecutive years, makes it an attractive investment. Despite the current challenges and the need for a turnaround, the outlook for the home goods and automotive markets is promising, giving me confidence in this high-risk play.
3. Cracker Barrel Old Barrel Store
Cracker Barrel, a restaurant stock with a yield of over 6%, has garnered my attention. The sluggish revenue growth, particularly in its country store segment, is a concern. However, there’s more to Cracker Barrel than meets the eye. What’s often overlooked is its expansion strategy, focusing on opening Maple Street locations. Although it’s early days, this initiative could be a catalyst for growth.
While the stock trades at a mid-teens forward earnings multiple, its potential for expansion is worth considering. Despite the challenges the company faces, the outlook may improve as they execute their expansion plans.