AT&T INC (T) Stock Fundamental Analysis
USA - NYSE:T - US00206R1023 - Common Stock
28.24 USD
+0.17 (+0.61%)
28.22 USD
-0.02 (-0.07%)
T gets a fundamental rating of 4 out of 10. The analysis compared the fundamentals against 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 valuation in line with the averages, but it does not seem to be growing.
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.
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 3.12%, T is in the better half of the industry, outperforming 66.67% of the companies in the same industry.
T has a better Return On Equity (12.03%) than 72.22% of its industry peers.
The Return On Invested Capital of T (5.25%) is better than 72.22% 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 6.32%.
The 3 year average ROIC (5.19%) for T is below the current ROIC(5.25%), indicating increased profibility in the last year.
| 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
T has a better Profit Margin (10.21%) than 72.22% of its industry peers.
In the last couple of years the Profit Margin of T has grown nicely.
T's Operating Margin of 19.86% is fine compared to the rest of the industry. T outperforms 75.00% of its industry peers.
In the last couple of years the Operating Margin of T has grown nicely.
Looking at the Gross Margin, with a value of 59.67%, 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 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
T has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it 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
T has a better debt/assets ratio than last year.
2.2 Solvency
T has an Altman-Z score of 0.90. This is a bad value and indicates that T is not financially healthy and even has some risk of bankruptcy.
The Altman-Z score of T (0.90) is comparable to the rest of the 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.
The Debt to FCF ratio of T (6.74) is better than 75.00% of its industry peers.
T has a Debt/Equity ratio of 1.17. This is a high value indicating a heavy dependency on external financing.
T has a Debt to Equity ratio (1.17) which is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.17 | ||
| Debt/FCF | 6.74 | ||
| Altman-Z | 0.9 |
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's Current ratio of 0.81 is on the low side compared to the rest of the industry. T is outperformed by 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
The earnings per share for T have decreased by -4.78% in the last year.
The Earnings Per Share has been decreasing by -8.79% on average over the past years.
T shows a small growth in Revenue. In the last year, the Revenue has grown by 1.46%.
Measured over the past years, T shows a decrease in Revenue. The Revenue has been decreasing by -7.56% on average per year.
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.
T is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.29% yearly.
EPS Next Y-7.63%
EPS Next 2Y0.14%
EPS Next 3Y4.01%
EPS Next 5Y5.24%
Revenue Next Year2.35%
Revenue Next 2Y1.87%
Revenue Next 3Y1.84%
Revenue Next 5Y2.29%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
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
A Price/Earnings ratio of 12.89 indicates a correct valuation of T.
T's Price/Earnings ratio is rather cheap when compared to the industry. T is cheaper than 88.89% of the companies in the same industry.
T is valuated cheaply when we compare the Price/Earnings ratio to 27.76, which is the current average of the S&P500 Index.
T is valuated correctly with a Price/Forward Earnings ratio of 12.46.
T's Price/Forward Earnings ratio is rather cheap when compared to the industry. T is cheaper than 86.11% of the companies in the same industry.
T is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 23.18, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.89 | ||
| Fwd PE | 12.46 |
4.2 Price Multiples
66.67% of the companies in the same industry are more expensive than T, based on the Enterprise Value to EBITDA ratio.
The rest of the industry has a similar Price/Free Cash Flow ratio as T.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.29 | ||
| EV/EBITDA | 7.08 |
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 2Y0.14%
EPS Next 3Y4.01%
5. Dividend
5.1 Amount
T has a Yearly Dividend Yield of 3.92%. Purely for dividend investing, there may be better candidates out there.
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 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.92% |
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.
T has decreased its dividend recently.
Dividend Growth(5Y)-10.97%
Div Incr Years0
Div Non Decr Years1
5.3 Sustainability
64.83% of the earnings are spent on dividend by T. This is not a sustainable payout ratio.
DP64.83%
EPS Next 2Y0.14%
EPS Next 3Y4.01%
28.24
+0.17 (+0.61%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupTelecommunication Services
GICS IndustryDiversified Telecommunication Services
Earnings (Last)
Earnings (Next)
Inst Owners66.66%
Inst Owner Change3.98%
Ins Owners0.06%
Ins Owner Change-1.19%
Market Cap201.93B
Analysts78.89
Price Target30.09 (6.55%)
Short Float %1.27%
Short Ratio2.89
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.92% |
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)0.13%
PT rev (3m)3.22%
EPS NQ rev (1m)0.11%
EPS NQ rev (3m)-1.9%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.31%
Revenue NQ rev (1m)0.03%
Revenue NQ rev (3m)0.64%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.64%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 12.89 | ||
| Fwd PE | 12.46 | ||
| P/S | 1.63 | ||
| P/FCF | 10.29 | ||
| P/OCF | 4.93 | ||
| P/B | 1.92 | ||
| P/tB | N/A | ||
| EV/EBITDA | 7.08 |
EPS(TTM)2.19
EY7.75%
EPS(NY)2.27
Fwd EY8.03%
FCF(TTM)2.74
FCFY9.72%
OCF(TTM)5.73
OCFY20.28%
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 | 0.9 |
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 2Y0.14%
EPS Next 3Y4.01%
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 2Y1.87%
Revenue Next 3Y1.84%
Revenue Next 5Y2.29%
EBIT growth 1Y0.41%
EBIT growth 3Y-2.47%
EBIT growth 5Y-3.83%
EBIT Next Year97.59%
EBIT Next 3Y28.47%
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%