![]() Going forward, the proliferation of 5G can boost demand for the company’s products, and that phenomenon may already be taking hold, as in America’s Southeast and Midwest the demand for fiber is double that for copper wiring. The company’s EBITDA, excluding certain items, was $2.1 billion, versus $2.19 during the same period a year earlier, and its free cash flow was $776 million, down from $943 million, excluding certain items.Īnd for 2022, Lumen expects free cash flow of $1.6 billion to $1.8 billion, along with EBITDA, excluding certain items, of $6.5 billion to $6.7 billion. However, those top lines only dropped 0.5% and 1.9% versus Q3, and Lumen agreed to sell “over one-third” of its exposure to “mass market fixed-line voice” to Apollo. consumer and small business revenue did drop 4.8% and 7.3% year-over-year last quarter. Solid Businesses and Growth Opportunitiesĭue in large part to the ongoing erosion of demand for fixed line voice services, the company’s enterprise and mass market i.e. What’s more, a relatively low $3.6 billion of its debt will have to be paid by the end of 2025. And although its debt of $30.5 billion is high, it’s less than four times its 2021 EBITDA, which is not considered elevated. LUMNįinally, on the company’s balance sheet, its current ratio of 1.57 indicates that it won’t have trouble paying it s debts anytime soon. Based on those numbers, Lumen should not have to reduce its dividend going forward. One doesn’t have to be an Excel pro or a math genius to figure out that. According to Seeking Alpha, columnist Valkyrie Trading Society, Lumen’s free cash flow looks poised to come in at $1.6 billion to $1.8 billion, while the $1 per share dividend costs about $1 billion. Meanwhile, the stock’s forward dividend yield is 8.7%.Īnd importantly, Lumen should not have great difficulty paying its $1 per year dividend. ![]() LUMN stock is trading for just eight times analysts’ average 2022 earnings per share estimate for the company and 10 times their mean 2023 earnings per share (EPS) estimate. ![]() Lumen provides fiber optic infrastructure and “edge-computing infrastructure” to small, medium, and large businesses. Because of these points, I recommend that investors buy LUMN stock. ![]() Moreover, the company appears to have solid, current businesses and decent growth opportunities. Lumen (NYSE: LUMN) stock is trading at a very low valuation and has an extremely high dividend yield, as well as an adequate balance sheet. ![]()
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