On Monday, AT&T (NYSE:T) confirmed that it will spin off its WarnerMedia entertainment unit and merge it with Discovery. While this will help AT&T reduce its debt and become a pure-play telecom again, it will also force the company to reduce its dividend significantly.
This pending dividend cut gives income-focused investors yet another reason to avoid AT&T shares. Rival telecom company Lumen Technologies (NYSE:LUMN) looks like a better dividend stock. Shares of Lumen Technologies have surged roughly 50% year to date, but the company still boasts a 7% dividend yield. That is similar to AT&T's current dividend yield and significantly higher than AT&T's yield will be after it cuts the dividend.
Source: Motley Fool
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