AT&T Stock Analysis

A real money distributor, this is what AT&T (T) looks like at a first glance. Strong from a dividend yield over 5%, AT&T has been on my radar since March 2011 when I put together the 9 stocks I was following. But beyond a high dividend yield, there must be more if you want to attract investors. Let’s take a look at AT&T:

The Company Stock Description:

This eternal rival of Verizon is engaged in an epic battle to dominate the world of telecommunications. Strong from a fast 3G network and several side operations (such as ip based market along with Yellow and White Pages publishing), AT&T has proven to be a strong and well established company. However, the main question is always; can it keep the rhythm and dance to a rapid evolving beat?

Stock Graph

AT&T stock analysis

The Company Ratios and Financial Info:

Dividend Metrics:

–          Current Dividend Yield

–          5 year Dividend Growth : 5.35%

–          1 year Dividend Growth : 2.41%

Company Metrics :

–          Sales Growth: 1.44%

–          Earnings Growth: 11.35%

–          P/E Ratio: 14.27

–          Margin Growth: 0.48

–          Payout Ratio: 52.32%

–          Return on Equity: 18.63

–          Debt to Capital Ratio: 0.38

Stock Metrics:

–          Ticker: T

–          Price: $31.42

–          Trend (technical analysis): up-trend

Upcoming opportunities and dangers:

I’d say that the AT&T battle with Verizon is definitely the most important danger for investors. Much like RIM who is constantly compared with the new darling Apple, AT&T will be face to face with any moves from its competitor. In fact, Verizon was recently the “flavour of the month” since they got the rights to market the iPhone before anyone and was recently voted #1 in customer service; something that AT&T is far from achieving.

AT&T benefits from a strong base of clients and a solid reputation. I’d say that over the short term, the company should continue performing and they might even be surprising compared to Verizon.

Final Thoughts

When we compare Verizon to AT&T as of March 2011, AT&T was definitely presenting an interesting perspective (as the price was below $28) while Verizon had gained significant momentum already. Since then, T has gone up and doesn’t represent a “deal” anymore in my opinion. The sales growth over the past year (along with the dividend growth) is interesting but when you look at a shorter period of time (1 year), numbers have slowed down. Can AT&T reverse the tendency and produce more growth in the upcoming years? That is the question!

disclaimer: I do not hold AT&T at the moment.

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  1. says

    I have enjoyed AT&T in my portfolio. The recent rise in price has even push my DRIP away from 2 shares to 1 share being re-invested. Not complaining though.

    Telefonica (NYSE:TEF with 8% yield) and France Telecom (NYSE:FTE with 8% yield) are 2 plays internationally with decent dividends too.

  2. clocks says

    I like T a lot, and own a bunch. Actually wish I bought more a year or so ago when it was cheaper.

    TPIE – thanks for the tip on TEF & FTE. Those two are intriguing.

  3. says

    Another great post!

    i learn so much from your site, allowing me, i think make better choices.

    Thanks again,


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