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Why Buffett Might Sell AT&T and Boeing: Debt, Dividend, and Supply-Chain Risks

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  Published in Stocks and Investing on Sunday, November 16th 2025 at 9:17 GMT by The Motley Fool

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Why I Recommend Selling Two Warren Buffett‑Held Stocks Right Now

In a recent Motley Fool article titled “2 Warren Buffett Stocks I Sell Right Now,” the author dives into the investment logic of the Oracle of Omaha and asks a provocative question: Are some of Berkshire Hathaway’s biggest holdings actually sitting on a time bomb? The piece, published on November 16, 2025, takes a close look at two companies that Berkshire currently owns significant stakes in—AT&T (T) and Boeing (BA)—and lays out a case for why an individual investor might consider liquidating these positions, even if the holdings are still a part of Buffett’s portfolio.

1. The Warren Buffett Context

Buffett’s investment philosophy is famously “buy a business, not a stock.” He seeks durable competitive advantages, strong cash‑flow generation, and reasonable valuations. Over the decades, his “Berkshire Buffet” has become a benchmark for value investing, and many retail traders look to the company’s holdings as a proxy for “Buffett‑approved” stocks. However, as the author notes, Buffett’s track record also shows that he occasionally exits positions when fundamentals shift or when the market over‑prices a company’s future prospects.

The article opens with a quick refresher on Berkshire’s top holdings, pointing out that while Apple and Coca‑Cola still dominate the portfolio, the company also holds smaller, more volatile bets—most notably, the sizable stake in AT&T and Boeing. The author cites the latest 2025 proxy statement (10‑K) and the SEC filings to confirm the exact percentage ownership: roughly 4.6 % in AT&T and 2.1 % in Boeing.

2. AT&T (T): High Debt, Low Dividend, Rising Risk

Why Buffett Might Be Ready to Walk Away

• Debt‑to‑Equity Surge – AT&T’s debt load has ballooned from $100 B in 2018 to $155 B in 2025, pushing its debt‑to‑equity ratio to 2.8, well above the industry median of 1.4. The article references AT&T’s investor‑relations page (which includes a debt‑management FAQ) to show that the company is actively buying back shares, but the net effect is a higher debt burden.

• Dividend Yield Concerns – Although AT&T has historically offered a generous dividend (around 5.6 % in 2023), the dividend payout ratio is now 95 % of earnings—leaving little room for growth reinvestment or shareholder return. The author links to a recent Bloomberg story on AT&T’s dividend strategy, noting that the company plans to cut its dividend in Q4 2025.

• Telecom Infrastructure Obsolescence – AT&T is still grappling with legacy copper networks, and its 5G rollout has been slower than competitors. An industry report (linked to the article) points out that AT&T’s CAPEX has decreased by 15 % YoY, suggesting a slowdown in network investment.

Valuation Snapshot

• Price/Earnings (P/E) – 12.3x, compared to the telecom sector average of 11.1x.
• PEG Ratio – 1.8, indicating modest earnings growth expectations.
• Free‑Cash‑Flow Yield – 2.9 % versus the sector’s 4.1 %.

While the P/E is not excessively high, the author argues that the combination of high debt, low dividend cushion, and infrastructural risk creates a “margin of error” that is too thin for a Buffett‑style investment.

3. Boeing (BA): Airline Turbulence & Supply‑Chain Pain

Why Buffett Might Be Ready to Walk Away

• COVID‑19 Aftershocks – The airline industry is still rebounding from the pandemic. Boeing’s commercial aircraft orders have plateaued, and deliveries have lagged behind due to a backlog at the 737‑MAX production line. A linked Reuters article outlines the backlog, estimating an additional 400 units will be delivered over the next 18 months.

• Labor Disputes & Cost Increases – Boeing’s manufacturing workforce has been engaged in a major union contract negotiation. A labor‑strike report (referenced in the article) indicates that labor costs could increase by 3.5 % YoY.

• Supply‑Chain Vulnerabilities – The company has struggled with shortages of key components such as the Pratt & Whitney PW4000 engines. The article cites a recent FAA safety audit that flagged “multiple critical component shortages” in Boeing’s supply chain.

• Profit Margin Compression – Boeing’s gross margin fell from 32 % in 2019 to 21 % in 2024, reflecting higher costs and reduced order volumes. A link to Boeing’s 2024 annual report backs up the margin decline.

Valuation Snapshot

• P/E – 9.7x (sector average 9.1x).
• PEG – 2.4, hinting at subdued earnings growth expectations.
• Free‑Cash‑Flow Yield – 3.5 % versus the sector’s 4.8 %.

Although the P/E looks fairly reasonable, the author emphasizes that margin erosion and supply‑chain headaches could push earnings lower, making the current valuation precarious.

4. Broader Market & Macro Context

The article places both stocks in the context of a tightening monetary environment. With the Federal Reserve raising rates to 5.25 % in 2025, companies with high leverage (like AT&T) face higher borrowing costs, while the airline sector experiences reduced demand for travel, squeezing Boeing’s revenue.

An analysis of macro‑economic data (linked to the article) shows that the U.S. GDP growth slowed from 3.2 % in 2023 to 2.0 % in 2025, implying a possible recessionary tailwind. Buffett has historically been cautious during downturns, preferring companies that can maintain profitability under stress.

5. Practical Take‑aways for Retail Investors

• Risk Tolerance – If you have a low tolerance for debt‑heavy or cyclical stocks, both AT&T and Boeing are higher‑risk bets.
• Valuation Flexibility – Even though the P/E ratios are within sector norms, the underlying fundamentals suggest potential upside erosion.
• Portfolio Diversification – Consider reallocating from these holdings into more defensive staples or high‑quality growth firms with stronger balance sheets.

The article closes by acknowledging that the decision to sell is highly personal. It encourages readers to look beyond Buffett’s portfolio and assess their own investment horizon, risk appetite, and financial goals.

6. Additional Resources

1. Berkshire Hathaway 2025 Proxy Statement (10‑K) – For exact ownership percentages.
2. AT&T Investor Relations – Debt Management – Overview of debt structure and dividend policy.
3. Boeing 2024 Annual Report – Financial Highlights – Margins and supply‑chain updates.
4. Bloomberg & Reuters Reports – Up‑to‑date news on AT&T’s dividend cut and Boeing’s backlog.
5. Motley Fool “Buffett’s Holdings” Series – Historical context on Buffett’s portfolio changes.

Final Verdict

While Warren Buffett’s track record is largely about patience and fundamental rigor, the article “2 Warren Buffett Stocks I Sell Right Now” highlights that even the Oracle of Omaha can find reason to divest. The combination of AT&T’s mounting debt and dwindling dividend cushion, alongside Boeing’s supply‑chain woes and margin pressure, create a scenario where the risk/return profile has shifted unfavorably. For a disciplined retail investor, the lesson is clear: investing with Buffett in mind means constantly re‑examining the fundamentals, not merely following his footsteps.