My SIL has what would politely be described as a modest portfolio. She owns 3 stocks: AT&T, Altria, and Exxon. All are heavy dividend payers.
T, however, has been on a downward slope for the past year, announces earnings today, but is now hampered with the whispers of “lead lined cables”, a holdover from the legacy company. Most of its revenue and profit from from cellular, but debt (they have finally, belatedly offloaded Dish and [whatever the second ill fated acquisition was], and the cellular business is healthy, if fairly mature.
Anyway, she’s concerned that she’s “losing money” and wants advice. As it’s at a low, and the business is a cash cow, and there is moat, and cash flow covers the dividend (still huge debt), my counsel is to sit tight, but she’s nervous.
I agree with you that sitting tight is the best option. The cows are already out of the barn, to late to shut the door.
Just collect the dividends and reinvest them in something else.
I owned T on and off for decades. It started when I worked for them through the 80s and into the early 90s. It’s been a terrible investment overall. Yes, the dividend is high, but that’s mainly because the stock price keeps declining. I finally sold ALL of it last year (1/18/22, at $27.245 [not comparable to today’s price due to restructuring of equity], had to look it up in my spreadsheet) because I had had enough. The thing is debt laden up to its eyeballs, it engages in repeated spurious acquisitions just to reverse them later after losing tons of money and adding more debt, and its main business line has substantial and durable competition. Add to all that, that it is a capital investment intensive business, and I have no desire to deal with it anymore. I am happy with my decision to sell.
I also owned XOM for many years, and it provided a very nice return over that time. However, after some scaremongering content that I read (much of it here on this board), I sold all of it last year (3/1/22, at $79.51) when oil exceeded $100/bbl thinking that that was likely the peak. At least for a while. I am not so happy with that sale as it wasn’t a peak, and the stock continued to rise since then. Luckily I did not sell my CVX and I did not sell my XLE (so I still have some exposure to XOM via that ETF anyway) and they are doing well.
ADDED: I also wouldn’t be surprised if AT&T lowers their dividend [again] sometime soon.