AT&T INC (T)
US00206R1023 - Common Stock
Taking everything into account, T scores 5 out of 10 in our fundamental rating. T was compared to 36 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 is valued quite cheap, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
T had positive earnings in the past year.
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
T has a better Return On Assets (3.49%) than 83.33% of its industry peers.
Looking at the Return On Equity, with a value of 13.74%, T belongs to the top of the industry, outperforming 88.89% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 5.46%, T is in the better half of the industry, outperforming 77.78% of the companies in the same industry.
T had an Average Return On Invested Capital over the past 3 years of 5.09%. This is in line with the industry average of 5.67%.
The 3 year average ROIC (5.09%) for T is below the current ROIC(5.46%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.49% | ||
| ROE | 13.74% | ||
| ROIC | 5.46% |
ROA(3y)1.64%
ROA(5y)1.28%
ROE(3y)5.58%
ROE(5y)4.19%
ROIC(3y)5.09%
ROIC(5y)4.8%
1.3 Margins
Looking at the Profit Margin, with a value of 11.59%, T belongs to the top of the industry, outperforming 86.11% of the companies in the same industry.
In the last couple of years the Profit Margin of T has remained more or less at the same level.
Looking at the Operating Margin, with a value of 20.15%, T belongs to the top of the industry, outperforming 83.33% of the companies in the same industry.
T's Operating Margin has improved in the last couple of years.
The Gross Margin of T (59.06%) is better than 61.11% of its industry peers.
T's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 20.15% | ||
| PM (TTM) | 11.59% | ||
| GM | 59.06% |
OM growth 3Y7.62%
OM growth 5Y5.58%
PM growth 3YN/A
PM growth 5Y0.43%
GM growth 3Y2.96%
GM growth 5Y2%
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.
The number of shares outstanding for T has been reduced compared to 5 years ago.
The debt/assets ratio for T has remained at the same level compared to a year ago.
2.2 Solvency
Based on the Altman-Z score of 0.67, we must say that T is in the distress zone and has some risk of bankruptcy.
T has a Altman-Z score of 0.67. This is comparable to the rest of the industry: T outperforms 41.67% of its industry peers.
The Debt to FCF ratio of T is 6.71, which is on the high side as it means it would take T, 6.71 years of fcf income to pay off all of its debts.
T's Debt to FCF ratio of 6.71 is amongst the best of the industry. T outperforms 80.56% of its industry peers.
A Debt/Equity ratio of 1.24 is on the high side and indicates that T has dependencies on debt financing.
T has a Debt to Equity ratio of 1.24. This is comparable to the rest of the industry: T outperforms 50.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.24 | ||
| Debt/FCF | 6.71 | ||
| Altman-Z | 0.67 |
ROIC/WACC0.82
WACC6.62%
2.3 Liquidity
T has a Current Ratio of 0.71. This is a bad value and indicates that T is not financially healthy enough and could expect problems in meeting its short term obligations.
The Current ratio of T (0.71) is worse than 77.78% of its industry peers.
A Quick Ratio of 0.67 indicates that T may have some problems paying its short term obligations.
With a Quick ratio value of 0.67, T is not doing good in the industry: 77.78% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.71 | ||
| Quick Ratio | 0.67 |
3. Growth
3.1 Past
T shows a strong negative growth in Earnings Per Share. In the last year the EPS decreased by -11.07%.
Measured over the past years, T shows a decrease in Earnings Per Share. The EPS has been decreasing by -7.30% on average per year.
Looking at the last year, T shows a small growth in Revenue. The Revenue has grown by 1.40% in the last year.
The Revenue has been decreasing by -6.44% on average over the past years.
EPS 1Y (TTM)-11.07%
EPS 3Y-8.83%
EPS 5Y-7.3%
EPS growth Q2Q-11.48%
Revenue 1Y (TTM)1.4%
Revenue growth 3Y-5.06%
Revenue growth 5Y-6.44%
Revenue growth Q2Q2.17%
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 2.48% on average per year.
The Revenue is expected to grow by 1.22% on average over the next years.
EPS Next Y-6.36%
EPS Next 2Y-1.38%
EPS Next 3Y0.04%
EPS Next 5Y2.48%
Revenue Next Year1.55%
Revenue Next 2Y1.19%
Revenue Next 3Y1.05%
Revenue Next 5Y1.22%
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.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 6.95, the valuation of T can be described as very cheap.
Based on the Price/Earnings ratio, T is valued cheaply inside the industry as 94.44% of the companies are valued more expensively.
T's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 25.20.
A Price/Forward Earnings ratio of 7.42 indicates a rather cheap valuation of T.
Based on the Price/Forward Earnings ratio, T is valued cheaply inside the industry as 97.22% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of T to the average of the S&P500 Index (21.63), we can say T is valued rather cheaply.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.95 | ||
| Fwd PE | 7.42 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of T indicates a somewhat cheap valuation: T is cheaper than 72.22% of the companies listed in the same industry.
T's Price/Free Cash Flow ratio is rather cheap when compared to the industry. T is cheaper than 88.89% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 5.86 | ||
| EV/EBITDA | 5.74 |
4.3 Compensation for Growth
The excellent profitability rating of T may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-1.38%
EPS Next 3Y0.04%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 6.60%, T is a good candidate for dividend investing.
T's Dividend Yield is rather good when compared to the industry average which is at 4.92. T pays more dividend than 83.33% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.44, T pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.6% |
5.2 History
The dividend of T decreases each year by -10.62%.
T has been paying a dividend for at least 10 years, so it has a reliable track record.
Dividend Growth(5Y)-10.62%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
57.33% of the earnings are spent on dividend by T. This is a bit on the high side, but may be sustainable.
DP57.33%
EPS Next 2Y-1.38%
EPS Next 3Y0.04%
AT&T INC
NYSE:T (4/26/2024, 4:32:51 PM)
After market: 16.75 0 (0%)16.75
+0.17 (+1.03%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupTelecommunication Services
GICS IndustryDiversified Telecommunication Services
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap119.81B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 6.6% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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Revenue beat(2)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
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Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 6.95 | ||
| Fwd PE | 7.42 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.49% | ||
| ROE | 13.74% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 20.15% | ||
| PM (TTM) | 11.59% | ||
| GM | 59.06% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.3
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.24 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.71 | ||
| Quick Ratio | 0.67 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-11.07%
EPS 3Y-8.83%
EPS 5Y
EPS growth Q2Q
EPS Next Y-6.36%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)1.4%
Revenue growth 3Y-5.06%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
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