AT&T INC (T) Stock Fundamental Analysis
NYSE:T - US00206R1023 - Common Stock
29.2 USD
-0.22 (-0.75%)
29.23 USD
+0.03 (+0.1%)
We assign a fundamental rating of 5 out of 10 to T. T was compared to 36 industry peers in the Diversified Telecommunication Services industry. T has an excellent profitability rating, but there are concerns on its financial health. T has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
In the past year T was profitable.
T had a positive operating cash flow in the past year.
In multiple years T reported negative net income over the last 5 years.
In the past 5 years T always reported a positive cash flow from operatings.
1.2 Ratios
With a decent Return On Assets value of 3.12%, T is doing good in the industry, outperforming 66.67% of the companies in the same industry.
T's Return On Equity of 12.03% is fine compared to the rest of the industry. T outperforms 72.22% of its industry peers.
With a decent Return On Invested Capital value of 5.25%, T is doing good in the industry, outperforming 72.22% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for T is in line with the industry average of 6.32%.
The last Return On Invested Capital (5.25%) for T is above the 3 year average (5.19%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.12% | ||
| ROE | 12.03% | ||
| ROIC | 5.25% |
ROA(3y)1.35%
ROA(5y)1.32%
ROE(3y)5.03%
ROE(5y)4.74%
ROIC(3y)5.19%
ROIC(5y)4.76%
1.3 Margins
The Profit Margin of T (10.21%) is better than 72.22% of its industry peers.
T's Profit Margin has improved in the last couple of years.
With a decent Operating Margin value of 19.86%, T is doing good in the industry, outperforming 75.00% of the companies in the same industry.
In the last couple of years the Operating Margin of T has grown nicely.
T has a better Gross Margin (59.67%) than 63.89% of its industry peers.
In the last couple of years the Gross Margin of T has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.86% | ||
| PM (TTM) | 10.21% | ||
| GM | 59.67% |
OM growth 3Y0.54%
OM growth 5Y4.03%
PM growth 3Y-16.01%
PM growth 5Y2.75%
GM growth 3Y2.85%
GM growth 5Y2.22%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), T is destroying value.
The number of shares outstanding for T has been increased compared to 1 year ago.
Compared to 5 years ago, T has less shares outstanding
Compared to 1 year ago, T has an improved debt to assets ratio.
2.2 Solvency
T has an Altman-Z score of 0.92. This is a bad value and indicates that T is not financially healthy and even has some risk of bankruptcy.
Looking at the Altman-Z score, with a value of 0.92, T is in the better half of the industry, outperforming 63.89% of the companies in the same industry.
T has a debt to FCF ratio of 6.74. This is a slightly negative value and a sign of low solvency as T would need 6.74 years to pay back of all of its debts.
T has a better Debt to FCF ratio (6.74) than 75.00% of its industry peers.
A Debt/Equity ratio of 1.17 is on the high side and indicates that T has dependencies on debt financing.
T's Debt to Equity ratio of 1.17 is in line compared to the rest of the industry. T outperforms 47.22% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.17 | ||
| Debt/FCF | 6.74 | ||
| Altman-Z | 0.92 |
ROIC/WACC0.75
WACC6.97%
2.3 Liquidity
A Current Ratio of 0.81 indicates that T may have some problems paying its short term obligations.
T has a Current ratio of 0.81. This is in the lower half of the industry: T underperforms 77.78% of its industry peers.
T has a Quick Ratio of 0.81. This is a bad value and indicates that T is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.76, T is doing worse than 77.78% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.81 | ||
| Quick Ratio | 0.76 |
3. Growth
3.1 Past
T shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -4.78%.
The Earnings Per Share has been decreasing by -8.79% on average over the past years.
Looking at the last year, T shows a small growth in Revenue. The Revenue has grown by 1.46% in the last year.
T shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -7.56% yearly.
EPS 1Y (TTM)-4.78%
EPS 3Y-12.73%
EPS 5Y-8.79%
EPS Q2Q%-5.26%
Revenue 1Y (TTM)1.46%
Revenue growth 3Y-3%
Revenue growth 5Y-7.56%
Sales Q2Q%3.52%
3.2 Future
T is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 5.24% yearly.
Based on estimates for the next years, T will show a small growth in Revenue. The Revenue will grow by 2.29% on average per year.
EPS Next Y-7.63%
EPS Next 2Y0.15%
EPS Next 3Y4.04%
EPS Next 5Y5.24%
Revenue Next Year2.35%
Revenue Next 2Y1.86%
Revenue Next 3Y1.83%
Revenue Next 5Y2.29%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
T is valuated correctly with a Price/Earnings ratio of 13.33.
86.11% of the companies in the same industry are more expensive than T, based on the Price/Earnings ratio.
T is valuated cheaply when we compare the Price/Earnings ratio to 27.03, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 12.88 indicates a correct valuation of T.
Based on the Price/Forward Earnings ratio, T is valued cheaply inside the industry as 80.56% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of T to the average of the S&P500 Index (22.54), we can say T is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.33 | ||
| Fwd PE | 12.88 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, T is valued a bit cheaper than the industry average as 66.67% of the companies are valued more expensively.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of T is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.64 | ||
| EV/EBITDA | 7.3 |
4.3 Compensation for Growth
T has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y0.15%
EPS Next 3Y4.04%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.75%, T has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 4.80, T pays a bit more dividend than its industry peers.
T's Dividend Yield is rather good when compared to the S&P500 average which is at 2.45.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.75% |
5.2 History
The dividend of T decreases each year by -10.97%.
T has been paying a dividend for at least 10 years, so it has a reliable track record.
The dividend of T decreased recently.
Dividend Growth(5Y)-10.97%
Div Incr Years0
Div Non Decr Years1
5.3 Sustainability
T pays out 64.83% of its income as dividend. This is not a sustainable payout ratio.
DP64.83%
EPS Next 2Y0.15%
EPS Next 3Y4.04%
29.2
-0.22 (-0.75%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupTelecommunication Services
GICS IndustryDiversified Telecommunication Services
Earnings (Last)
Earnings (Next)
Inst Owners66.3%
Inst Owner Change3.98%
Ins Owners0.06%
Ins Owner Change-1.22%
Market Cap208.79B
Analysts78.89
Price Target30.06 (2.95%)
Short Float %1.21%
Short Ratio2.73
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.75% |
Yearly Dividend1.15
Dividend Growth(5Y)-10.97%
DP64.83%
Div Incr Years0
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.78%
Min EPS beat(2)2.7%
Max EPS beat(2)2.87%
EPS beat(4)4
Avg EPS beat(4)3.78%
Min EPS beat(4)2.7%
Max EPS beat(4)6.05%
EPS beat(8)6
Avg EPS beat(8)1.22%
EPS beat(12)10
Avg EPS beat(12)2.2%
EPS beat(16)13
Avg EPS beat(16)2.36%
Revenue beat(2)0
Avg Revenue beat(2)-0.96%
Min Revenue beat(2)-1.08%
Max Revenue beat(2)-0.84%
Revenue beat(4)0
Avg Revenue beat(4)-1.45%
Min Revenue beat(4)-2.71%
Max Revenue beat(4)-0.84%
Revenue beat(8)0
Avg Revenue beat(8)-1.68%
Revenue beat(12)0
Avg Revenue beat(12)-1.77%
Revenue beat(16)0
Avg Revenue beat(16)-5.8%
PT rev (1m)1.83%
PT rev (3m)3.63%
EPS NQ rev (1m)0.08%
EPS NQ rev (3m)-1.76%
EPS NY rev (1m)-0.3%
EPS NY rev (3m)0.12%
Revenue NQ rev (1m)-0.06%
Revenue NQ rev (3m)0.42%
Revenue NY rev (1m)0.05%
Revenue NY rev (3m)0.64%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.33 | ||
| Fwd PE | 12.88 | ||
| P/S | 1.68 | ||
| P/FCF | 10.64 | ||
| P/OCF | 5.1 | ||
| P/B | 1.98 | ||
| P/tB | N/A | ||
| EV/EBITDA | 7.3 |
EPS(TTM)2.19
EY7.5%
EPS(NY)2.27
Fwd EY7.76%
FCF(TTM)2.74
FCFY9.4%
OCF(TTM)5.73
OCFY19.61%
SpS17.34
BVpS14.72
TBVpS-12.72
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.12% | ||
| ROE | 12.03% | ||
| ROCE | 6.9% | ||
| ROIC | 5.25% | ||
| ROICexc | 5.41% | ||
| ROICexgc | 12.47% | ||
| OM | 19.86% | ||
| PM (TTM) | 10.21% | ||
| GM | 59.67% | ||
| FCFM | 15.83% |
ROA(3y)1.35%
ROA(5y)1.32%
ROE(3y)5.03%
ROE(5y)4.74%
ROIC(3y)5.19%
ROIC(5y)4.76%
ROICexc(3y)5.26%
ROICexc(5y)4.87%
ROICexgc(3y)12.3%
ROICexgc(5y)11.33%
ROCE(3y)6.83%
ROCE(5y)6.27%
ROICexcg growth 3Y9.2%
ROICexcg growth 5Y-1.63%
ROICexc growth 3Y4.26%
ROICexc growth 5Y2.35%
OM growth 3Y0.54%
OM growth 5Y4.03%
PM growth 3Y-16.01%
PM growth 5Y2.75%
GM growth 3Y2.85%
GM growth 5Y2.22%
F-Score7
Asset Turnover0.31
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.17 | ||
| Debt/FCF | 6.74 | ||
| Debt/EBITDA | 2.7 | ||
| Cap/Depr | 102% | ||
| Cap/Sales | 17.2% | ||
| Interest Coverage | 3.62 | ||
| Cash Conversion | 89.93% | ||
| Profit Quality | 154.96% | ||
| Current Ratio | 0.81 | ||
| Quick Ratio | 0.76 | ||
| Altman-Z | 0.92 |
F-Score7
WACC6.97%
ROIC/WACC0.75
Cap/Depr(3y)100.82%
Cap/Depr(5y)90.95%
Cap/Sales(3y)15.8%
Cap/Sales(5y)13.85%
Profit Quality(3y)N/A
Profit Quality(5y)N/A
High Growth Momentum
Growth
EPS 1Y (TTM)-4.78%
EPS 3Y-12.73%
EPS 5Y-8.79%
EPS Q2Q%-5.26%
EPS Next Y-7.63%
EPS Next 2Y0.15%
EPS Next 3Y4.04%
EPS Next 5Y5.24%
Revenue 1Y (TTM)1.46%
Revenue growth 3Y-3%
Revenue growth 5Y-7.56%
Sales Q2Q%3.52%
Revenue Next Year2.35%
Revenue Next 2Y1.86%
Revenue Next 3Y1.83%
Revenue Next 5Y2.29%
EBIT growth 1Y0.41%
EBIT growth 3Y-2.47%
EBIT growth 5Y-3.83%
EBIT Next Year97.55%
EBIT Next 3Y28.51%
EBIT Next 5Y17.43%
FCF growth 1Y7.65%
FCF growth 3Y-11.18%
FCF growth 5Y-8.74%
OCF growth 1Y10.7%
OCF growth 3Y-2.6%
OCF growth 5Y-4.45%