AT&T's long-anticipated dividend reduction became official last week as the telecommunications giant reduced its payout by 47%, in line with management's previous guidance. With the firm's rebased dividend in place, we are upgrading AT&T's Dividend Safety Score to Safe. This reflects the company's improved financial position and more defensive business mix. Going forward, AT&T's dividend will consume roughly 40% of the company's free cash flow, down from around 60% previously. Retaining more cash flow provides AT&T with flexibility to increase investment in 5G wireless and fiber internet while enabling faster debt reduction.

Earlier this year, PPL cut its dividend by around 50%, an expected move following the firm's divesture of its U.K.-based utility operations that previously generated roughly half the company's earnings.This payout reduction better aligned the dividend with the company's remaining operations in Pennsylvania and Kentucky and to a much more comfortable level that can support future dividend growth.

Shares of Philip Morris International have slumped 15% since Russia invaded Ukraine on February 24. Unlike most companies headquartered in America, Philip Morris has meaningful ties to Russia and Ukraine. Russia accounted for 6% of the firm's 2021 net revenues, and Ukraine added another 2%. These countries also played a key role in Philip Morris's push into so-called reduced-risk products such as heated tobacco, which represented 29% of net revenues last year and are the firm's primary long-term growth driver. Philip Morris's heated tobacco volumes grew 25% in 2021, and Russia accounted for 17% of all shipments. Ukraine has also been called out as an important contributor here, suggesting both countries could combine for over 20% of Philip Morris's heated [...]

This year, CVS Health raised its dividend by 10% after keeping the payout frozen for five years as the company prioritized deleveraging efforts, following the sizable 2018 acquisition of health insurer Aetna.With leverage reduced to pre-acquisition levels, CVS now intends to keep raising the annual payout in line with earnings growth. This plan implies the dividend is likely to grow at a high single-digit pace in the years ahead.