AT&T INC (T)

US00206R1023 - Common Stock

21.355  -0.02 (-0.07%)

Fundamental Rating

5

Taking everything into account, T scores 5 out of 10 in our fundamental rating. T was compared to 34 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 cheap, but on the other hand it scores bad on growth.



7

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.
T had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

T's Return On Assets of 3.15% is fine compared to the rest of the industry. T outperforms 79.41% of its industry peers.
T has a Return On Equity of 11.89%. This is amongst the best in the industry. T outperforms 91.18% of its industry peers.
T has a Return On Invested Capital of 5.43%. This is in the better half of the industry: T outperforms 79.41% of its industry peers.
The Average Return On Invested Capital over the past 3 years for T is in line with the industry average of 6.12%.
The 3 year average ROIC (5.09%) for T is below the current ROIC(5.43%), indicating increased profibility in the last year.
Industry RankSector Rank
ROA 3.15%
ROE 11.89%
ROIC 5.43%
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 10.25%, T belongs to the top of the industry, outperforming 85.29% 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 20.07%, T is in the better half of the industry, outperforming 79.41% of the companies in the same industry.
T's Operating Margin has improved in the last couple of years.
T has a better Gross Margin (59.61%) than 61.76% of its industry peers.
In the last couple of years the Gross Margin of T has grown nicely.
Industry RankSector Rank
OM 20.07%
PM (TTM) 10.25%
GM 59.61%
OM growth 3Y7.62%
OM growth 5Y5.58%
PM growth 3YN/A
PM growth 5Y0.43%
GM growth 3Y2.96%
GM growth 5Y2%

2

2. Health

2.1 Basic Checks

T has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
Compared to 1 year ago, T has more shares outstanding
The number of shares outstanding for T has been reduced compared to 5 years ago.
Compared to 1 year ago, T has about the same debt to assets ratio.

2.2 Solvency

Based on the Altman-Z score of 0.79, we must say that T is in the distress zone and has some risk of bankruptcy.
T's Altman-Z score of 0.79 is on the low side compared to the rest of the industry. T is outperformed by 61.76% of its industry peers.
The Debt to FCF ratio of T is 6.22, which is on the high side as it means it would take T, 6.22 years of fcf income to pay off all of its debts.
The Debt to FCF ratio of T (6.22) is better than 82.35% of its industry peers.
A Debt/Equity ratio of 1.19 is on the high side and indicates that T has dependencies on debt financing.
T has a Debt to Equity ratio (1.19) which is comparable to the rest of the industry.
Industry RankSector Rank
Debt/Equity 1.19
Debt/FCF 6.22
Altman-Z 0.79
ROIC/WACC0.82
WACC6.61%

2.3 Liquidity

A Current Ratio of 0.70 indicates that T may have some problems paying its short term obligations.
With a Current ratio value of 0.70, T is not doing good in the industry: 76.47% of the companies in the same industry are doing better.
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.
T has a worse Quick ratio (0.66) than 76.47% of its industry peers.
Industry RankSector Rank
Current Ratio 0.7
Quick Ratio 0.66

3

3. Growth

3.1 Past

T shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -8.73%.
T shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -7.30% yearly.
Looking at the last year, T shows a small growth in Revenue. The Revenue has grown by 0.62% in the last year.
The Revenue has been decreasing by -6.44% on average over the past years.
EPS 1Y (TTM)-8.73%
EPS 3Y-8.83%
EPS 5Y-7.3%
EPS Q2Q%-9.52%
Revenue 1Y (TTM)0.62%
Revenue growth 3Y-5.06%
Revenue growth 5Y-6.44%
Sales Q2Q%-0.4%

3.2 Future

The Earnings Per Share is expected to grow by 1.22% on average over the next years.
The Revenue is expected to grow by 1.42% on average over the next years.
EPS Next Y-6.84%
EPS Next 2Y-1.88%
EPS Next 3Y0.13%
EPS Next 5Y1.22%
Revenue Next Year0.66%
Revenue Next 2Y1.14%
Revenue Next 3Y1.14%
Revenue Next 5Y1.42%

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.

7

4. Valuation

4.1 Price/Earnings Ratio

With a Price/Earnings ratio of 9.28, the valuation of T can be described as very reasonable.
T's Price/Earnings ratio is rather cheap when compared to the industry. T is cheaper than 97.06% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 31.52, T is valued rather cheaply.
The Price/Forward Earnings ratio is 9.20, which indicates a very decent valuation of T.
Based on the Price/Forward Earnings ratio, T is valued cheaply inside the industry as 91.18% of the companies are valued more expensively.
T's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 22.55.
Industry RankSector Rank
PE 9.28
Fwd PE 9.2

4.2 Price Multiples

76.47% of the companies in the same industry are more expensive than T, based on the Enterprise Value to EBITDA ratio.
T's Price/Free Cash Flow ratio is rather cheap when compared to the industry. T is cheaper than 88.24% of the companies in the same industry.
Industry RankSector Rank
P/FCF 7.3
EV/EBITDA 6.36

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 2Y-1.88%
EPS Next 3Y0.13%

5

5. Dividend

5.1 Amount

With a Yearly Dividend Yield of 5.23%, T is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 4.82, 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 2.22.
Industry RankSector Rank
Dividend Yield 5.23%

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

T pays out 65.27% of its income as dividend. This is not a sustainable payout ratio.
DP65.27%
EPS Next 2Y-1.88%
EPS Next 3Y0.13%

AT&T INC

NYSE:T (10/14/2024, 11:13:09 AM)

21.355

-0.02 (-0.07%)

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 Cap153.12B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 5.23%
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
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)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
Industry RankSector Rank
PE 9.28
Fwd PE 9.2
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 RankSector Rank
ROA 3.15%
ROE 11.89%
ROCE
ROIC
ROICexc
ROICexgc
OM 20.07%
PM (TTM) 10.25%
GM 59.61%
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 Turnover0.31
Health
Industry RankSector Rank
Debt/Equity 1.19
Debt/FCF
Debt/EBITDA
Cap/Depr
Cap/Sales
Interest Coverage
Cash Conversion
Profit Quality
Current Ratio 0.7
Quick Ratio 0.66
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)
High Growth Momentum
Growth
EPS 1Y (TTM)-8.73%
EPS 3Y-8.83%
EPS 5Y
EPS Q2Q%
EPS Next Y-6.84%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)0.62%
Revenue growth 3Y-5.06%
Revenue growth 5Y
Sales 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
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y