AT&T INC (T) Stock Fundamental Analysis
NYSE:T - New York Stock Exchange, Inc. - US00206R1023 - Common Stock - Currency: USD
Overall T gets a fundamental rating of 4 out of 10. We evaluated T against 32 industry peers in the Diversified Telecommunication Services industry. While T has a great profitability rating, there are quite some concerns on its financial health. T has a valuation in line with the averages, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
T had positive earnings in the past year.
In the past year T had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: T reported negative net income in multiple years.
Each year in the past 5 years T had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 2.96%, T is in the better half of the industry, outperforming 65.63% of the companies in the same industry.
T's Return On Equity of 11.32% is fine compared to the rest of the industry. T outperforms 71.88% of its industry peers.
T's Return On Invested Capital of 5.31% is fine compared to the rest of the industry. T outperforms 68.75% of its industry peers.
T had an Average Return On Invested Capital over the past 3 years of 5.19%. This is in line with the industry average of 7.13%.
The last Return On Invested Capital (5.31%) for T is above the 3 year average (5.19%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.96% | ||
| ROE | 11.32% | ||
| ROIC | 5.31% |
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
T has a Profit Margin of 9.55%. This is in the better half of the industry: T outperforms 68.75% of its industry peers.
T's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 19.84%, T is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
T's Operating Margin has improved in the last couple of years.
With a Gross Margin value of 59.90%, T perfoms like the industry average, outperforming 53.13% of the companies in the same industry.
T's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.84% | ||
| PM (TTM) | 9.55% | ||
| GM | 59.9% |
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.
T has more shares outstanding than it did 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
Based on the Altman-Z score of 0.90, we must say that T is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 0.90, T perfoms like the industry average, outperforming 50.00% of the companies in the same industry.
The Debt to FCF ratio of T is 6.47, which is on the high side as it means it would take T, 6.47 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 6.47, T is doing good in the industry, outperforming 75.00% of the companies in the same industry.
A Debt/Equity ratio of 1.13 is on the high side and indicates that T has dependencies on debt financing.
T's Debt to Equity ratio of 1.13 is in line compared to the rest of the industry. T outperforms 53.13% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.13 | ||
| Debt/FCF | 6.47 | ||
| Altman-Z | 0.9 |
ROIC/WACC0.75
WACC7.11%
2.3 Liquidity
T has a Current Ratio of 0.70. This is a bad value and indicates that T is not financially healthy enough and could expect problems in meeting its short term obligations.
T has a Current ratio of 0.70. This is amonst the worse of the industry: T underperforms 81.25% of its industry peers.
T has a Quick Ratio of 0.70. This is a bad value and indicates that T is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.65, T is not doing good in the industry: 81.25% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.7 | ||
| Quick Ratio | 0.65 |
3. Growth
3.1 Past
T shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -5.93%.
Measured over the past years, T shows a decrease in Earnings Per Share. The EPS has been decreasing by -8.79% on average per year.
Looking at the last year, T shows a small growth in Revenue. The Revenue has grown by 0.50% in the last year.
The Revenue has been decreasing by -7.56% on average over the past years.
EPS 1Y (TTM)-5.93%
EPS 3Y-12.73%
EPS 5Y-8.79%
EPS Q2Q%-7.27%
Revenue 1Y (TTM)0.5%
Revenue growth 3Y-3%
Revenue growth 5Y-7.56%
Sales Q2Q%1.99%
3.2 Future
Based on estimates for the next years, T will show a small growth in Earnings Per Share. The EPS will grow by 6.07% on average per year.
The Revenue is expected to grow by 2.18% on average over the next years.
EPS Next Y-7.34%
EPS Next 2Y0.39%
EPS Next 3Y4.02%
EPS Next 5Y6.07%
Revenue Next Year1.7%
Revenue Next 2Y1.52%
Revenue Next 3Y1.53%
Revenue Next 5Y2.18%
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
The Price/Earnings ratio is 12.77, which indicates a correct valuation of T.
75.00% of the companies in the same industry are more expensive than T, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 27.45. T is valued rather cheaply when compared to this.
Based on the Price/Forward Earnings ratio of 12.45, the valuation of T can be described as correct.
75.00% of the companies in the same industry are more expensive than T, based on the Price/Forward Earnings ratio.
T's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 21.90.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.77 | ||
| Fwd PE | 12.45 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, T is valued a bit cheaper than the industry average as 68.75% of the companies are valued more expensively.
T's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.47 | ||
| EV/EBITDA | 7.17 |
4.3 Compensation for Growth
The decent profitability rating of T may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y0.39%
EPS Next 3Y4.02%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 3.96%, T has a reasonable but not impressive dividend return.
T's Dividend Yield is a higher than the industry average which is at 5.16.
T's Dividend Yield is rather good when compared to the S&P500 average which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.96% |
5.2 History
The dividend of T decreases each year by -10.97%.
T has paid a dividend for at least 10 years, which is 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 70.36% of its income as dividend. This is not a sustainable payout ratio.
DP70.36%
EPS Next 2Y0.39%
EPS Next 3Y4.02%
28.36
+0.05 (+0.18%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupTelecommunication Services
GICS IndustryDiversified Telecommunication Services
Earnings (Last)
Earnings (Next)
Inst Owners65.83%
Inst Owner Change3.65%
Ins Owners0.06%
Ins Owner Change-0.23%
Market Cap204.07B
Analysts78.92
Price Target29.15 (2.79%)
Short Float %1.17%
Short Ratio2.54
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.96% |
Yearly Dividend1.15
Dividend Growth(5Y)-10.97%
DP70.36%
Div Incr Years0
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.37%
Min EPS beat(2)2.7%
Max EPS beat(2)6.05%
EPS beat(4)3
Avg EPS beat(4)2.5%
Min EPS beat(4)-2.25%
Max EPS beat(4)6.05%
EPS beat(8)6
Avg EPS beat(8)1.15%
EPS beat(12)10
Avg EPS beat(12)2.39%
EPS beat(16)13
Avg EPS beat(16)2.81%
Revenue beat(2)0
Avg Revenue beat(2)-1.12%
Min Revenue beat(2)-1.17%
Max Revenue beat(2)-1.08%
Revenue beat(4)0
Avg Revenue beat(4)-1.83%
Min Revenue beat(4)-2.71%
Max Revenue beat(4)-1.08%
Revenue beat(8)0
Avg Revenue beat(8)-1.83%
Revenue beat(12)0
Avg Revenue beat(12)-1.84%
Revenue beat(16)0
Avg Revenue beat(16)-6.87%
PT rev (1m)0.52%
PT rev (3m)7.16%
EPS NQ rev (1m)0.26%
EPS NQ rev (3m)-0.96%
EPS NY rev (1m)0.44%
EPS NY rev (3m)0.79%
Revenue NQ rev (1m)0.01%
Revenue NQ rev (3m)0.77%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.29%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.77 | ||
| Fwd PE | 12.45 | ||
| P/S | 1.66 | ||
| P/FCF | 10.47 | ||
| P/OCF | 5.07 | ||
| P/B | 1.97 | ||
| P/tB | N/A | ||
| EV/EBITDA | 7.17 |
EPS(TTM)2.22
EY7.83%
EPS(NY)2.28
Fwd EY8.03%
FCF(TTM)2.71
FCFY9.55%
OCF(TTM)5.6
OCFY19.74%
SpS17.08
BVpS14.42
TBVpS-12.83
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.96% | ||
| ROE | 11.32% | ||
| ROCE | 6.98% | ||
| ROIC | 5.31% | ||
| ROICexc | 5.41% | ||
| ROICexgc | 12.65% | ||
| OM | 19.84% | ||
| PM (TTM) | 9.55% | ||
| GM | 59.9% | ||
| FCFM | 15.85% |
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-Score8
Asset Turnover0.31
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.13 | ||
| Debt/FCF | 6.47 | ||
| Debt/EBITDA | 2.6 | ||
| Cap/Depr | 100.29% | ||
| Cap/Sales | 16.91% | ||
| Interest Coverage | 3.56 | ||
| Cash Conversion | 89.28% | ||
| Profit Quality | 165.94% | ||
| Current Ratio | 0.7 | ||
| Quick Ratio | 0.65 | ||
| Altman-Z | 0.9 |
F-Score8
WACC7.11%
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)-5.93%
EPS 3Y-12.73%
EPS 5Y-8.79%
EPS Q2Q%-7.27%
EPS Next Y-7.34%
EPS Next 2Y0.39%
EPS Next 3Y4.02%
EPS Next 5Y6.07%
Revenue 1Y (TTM)0.5%
Revenue growth 3Y-3%
Revenue growth 5Y-7.56%
Sales Q2Q%1.99%
Revenue Next Year1.7%
Revenue Next 2Y1.52%
Revenue Next 3Y1.53%
Revenue Next 5Y2.18%
EBIT growth 1Y-1.17%
EBIT growth 3Y-2.47%
EBIT growth 5Y-3.83%
EBIT Next Year97.53%
EBIT Next 3Y28.45%
EBIT Next 5Y17.76%
FCF growth 1Y43.57%
FCF growth 3Y-11.18%
FCF growth 5Y-8.74%
OCF growth 1Y22.15%
OCF growth 3Y-2.6%
OCF growth 5Y-4.45%