AT&T INC (T)

US00206R1023 - Common Stock

16.31  -0.2 (-1.21%)

After market: 16.2999 -0.01 (-0.06%)

Fundamental Rating

5

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 has a bad growth rate and is valued cheaply.



8

1. Profitability

1.1 Basic Checks

In the past year T was profitable.
In the past year T had a positive cash flow from operations.
In multiple years T reported negative net income over the last 5 years.
T had a positive operating cash flow in each of the past 5 years.

1.2 Ratios

The Return On Assets of T (3.49%) is better than 83.33% of its industry peers.
The Return On Equity of T (13.74%) is better than 88.89% of its industry peers.
T's Return On Invested Capital of 5.46% is fine compared to the rest of the industry. T outperforms 77.78% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for T is in line with the industry average of 5.64%.
The last Return On Invested Capital (5.46%) for T is above the 3 year average (5.09%), which is a sign of increasing profitability.
Industry RankSector 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

T has a Profit Margin of 11.59%. This is amongst the best in the industry. T outperforms 86.11% of its industry peers.
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.
Looking at the Gross Margin, with a value of 59.06%, T is in the better half of the industry, outperforming 63.89% of the companies in the same industry.
In the last couple of years the Gross Margin of T has grown nicely.
Industry RankSector 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%

3

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.
T has more shares outstanding than it did 1 year ago.
T has less shares outstanding than it did 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 0.67, we must say that T is in the distress zone and has some risk of bankruptcy.
T has a Altman-Z score (0.67) which is comparable to the rest of the industry.
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.
With an excellent Debt to FCF ratio value of 6.71, T belongs to the best of the industry, outperforming 80.56% of the companies in the same industry.
T has a Debt/Equity ratio of 1.24. This is a high value indicating a heavy dependency on external financing.
Looking at the Debt to Equity ratio, with a value of 1.24, T is in line with its industry, outperforming 50.00% of the companies in the same industry.
Industry RankSector Rank
Debt/Equity 1.24
Debt/FCF 6.71
Altman-Z 0.67
ROIC/WACC0.83
WACC6.58%

2.3 Liquidity

A Current Ratio of 0.71 indicates that T may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.71, T is doing worse than 77.78% of the companies in the same industry.
A Quick Ratio of 0.67 indicates that T may have some problems paying its short term obligations.
T has a worse Quick ratio (0.67) than 77.78% of its industry peers.
Industry RankSector Rank
Current Ratio 0.71
Quick Ratio 0.67

3

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.
T shows a small growth in Revenue. In the last year, the Revenue has grown by 1.40%.
T shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -6.44% yearly.
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

T is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 2.48% yearly.
T is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.22% yearly.
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

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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.

8

4. Valuation

4.1 Price/Earnings Ratio

Based on the Price/Earnings ratio of 6.77, the valuation of T can be described as very cheap.
Based on the Price/Earnings ratio, T is valued cheaper than 97.22% of the companies in the same industry.
T's Price/Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 24.95.
The Price/Forward Earnings ratio is 7.23, which indicates a rather cheap valuation of T.
Compared to the rest of the industry, the Price/Forward Earnings ratio of T indicates a rather cheap valuation: T is cheaper than 97.22% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.40, T is valued rather cheaply.
Industry RankSector Rank
PE 6.77
Fwd PE 7.23

4.2 Price Multiples

T's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. T is cheaper than 72.22% of the companies in the same industry.
88.89% of the companies in the same industry are more expensive than T, based on the Price/Free Cash Flow ratio.
Industry RankSector Rank
P/FCF 5.7
EV/EBITDA 5.72

4.3 Compensation for Growth

T has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-1.38%
EPS Next 3Y0.04%

6

5. Dividend

5.1 Amount

T has a Yearly Dividend Yield of 6.80%, which is a nice return.
T's Dividend Yield is rather good when compared to the industry average which is at 4.96. T pays more dividend than 88.89% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 2.45, T pays a better dividend.
Industry RankSector Rank
Dividend Yield 6.8%

5.2 History

The dividend of T decreases each year by -10.62%.
T has paid a dividend for at least 10 years, which is 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 (4/22/2024, 5:41:43 PM)

After market: 16.2999 -0.01 (-0.06%)

16.31

-0.2 (-1.21%)

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 Cap116.66B
Analysts
Price Target
Dividend
Industry RankSector Rank
Dividend Yield 6.8%
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
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Min EPS 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)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
Industry RankSector Rank
PE 6.77
Fwd PE 7.23
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 3.49%
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 RankSector 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
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y