AT&T INC (T) Stock Fundamental Analysis
NYSE:T - New York Stock Exchange, Inc. - US00206R1023 - Common Stock - Currency: USD
We assign a fundamental rating of 4 out of 10 to T. T was compared to 35 industry peers in the Diversified Telecommunication Services industry. T scores excellent on profitability, but there are concerns on its financial health. T is valued correctly, 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.
Each year in the past 5 years T had a positive operating cash flow.
1.2 Ratios
With a decent Return On Assets value of 3.12%, T is doing good in the industry, outperforming 65.71% of the companies in the same industry.
Looking at the Return On Equity, with a value of 12.03%, T is in the better half of the industry, outperforming 71.43% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 5.25%, T is in the better half of the industry, outperforming 71.43% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for T is in line with the industry average of 7.11%.
The last Return On Invested Capital (5.25%) for T is above the 3 year average (5.19%), which is a sign of increasing profitability.
| 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
With a decent Profit Margin value of 10.21%, T is doing good in the industry, outperforming 71.43% of the companies in the same industry.
In the last couple of years the Profit Margin of T has grown nicely.
T has a better Operating Margin (19.86%) than 77.14% of its industry peers.
T's Operating Margin has improved in the last couple of years.
T has a Gross Margin of 59.67%. This is comparable to the rest of the industry: T outperforms 60.00% of its industry peers.
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
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), T is destroying value.
Compared to 1 year ago, T has more shares outstanding
Compared to 5 years ago, T has less shares outstanding
The debt/assets ratio for T has been reduced compared to a year ago.
2.2 Solvency
T has an Altman-Z score of 0.91. This is a bad value and indicates that T is not financially healthy and even has some risk of bankruptcy.
T has a Altman-Z score (0.91) which is in line with its industry peers.
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.
Looking at the Debt to FCF ratio, with a value of 6.74, T is in the better half of the industry, outperforming 74.29% of the companies in the same industry.
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 in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.17 | ||
| Debt/FCF | 6.74 | ||
| Altman-Z | 0.91 |
ROIC/WACC0.74
WACC7.05%
2.3 Liquidity
T has a Current 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.
The Current ratio of T (0.81) is worse than 71.43% 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.
T has a worse Quick ratio (0.76) than 71.43% of its industry peers.
| 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.
The Revenue has been growing slightly by 1.46% in the past year.
T shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -7.56% yearly.
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 6.07% yearly.
T is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.18% yearly.
EPS Next Y-7.35%
EPS Next 2Y0.44%
EPS Next 3Y4.07%
EPS Next 5Y6.07%
Revenue Next Year2.29%
Revenue Next 2Y1.83%
Revenue Next 3Y1.76%
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
A Price/Earnings ratio of 13.13 indicates a correct valuation of T.
82.86% of the companies in the same industry are more expensive than T, based on the Price/Earnings ratio.
T is valuated cheaply when we compare the Price/Earnings ratio to 26.93, which is the current average of the S&P500 Index.
A Price/Forward Earnings ratio of 12.61 indicates a correct valuation of T.
T's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. T is cheaper than 80.00% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 35.31. T is valued rather cheaply when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.13 | ||
| Fwd PE | 12.61 |
4.2 Price Multiples
71.43% 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 in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.48 | ||
| EV/EBITDA | 7.14 |
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 2Y0.44%
EPS Next 3Y4.07%
5. Dividend
5.1 Amount
T has a Yearly Dividend Yield of 3.96%. 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 5.19.
T's Dividend Yield is rather good when compared to the S&P500 average which is at 2.39.
| 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 64.83% of its income as dividend. This is not a sustainable payout ratio.
DP64.83%
EPS Next 2Y0.44%
EPS Next 3Y4.07%
28.75
+0.35 (+1.23%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupTelecommunication Services
GICS IndustryDiversified Telecommunication Services
Earnings (Last)
Earnings (Next)
Inst Owners66.3%
Inst Owner Change3.76%
Ins Owners0.06%
Ins Owner Change-3.98%
Market Cap205.57B
Analysts78.38
Price Target30.06 (4.56%)
Short Float %1.12%
Short Ratio2.53
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 3.96% |
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)3.09%
PT rev (3m)8.14%
EPS NQ rev (1m)-1.99%
EPS NQ rev (3m)-1.83%
EPS NY rev (1m)0%
EPS NY rev (3m)0.65%
Revenue NQ rev (1m)0.85%
Revenue NQ rev (3m)0.49%
Revenue NY rev (1m)0.6%
Revenue NY rev (3m)0.97%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 13.13 | ||
| Fwd PE | 12.61 | ||
| P/S | 1.66 | ||
| P/FCF | 10.48 | ||
| P/OCF | 5.02 | ||
| P/B | 1.95 | ||
| P/tB | N/A | ||
| EV/EBITDA | 7.14 |
EPS(TTM)2.19
EY7.62%
EPS(NY)2.28
Fwd EY7.93%
FCF(TTM)2.74
FCFY9.55%
OCF(TTM)5.73
OCFY19.92%
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 | 0.91 |
F-Score7
WACC7.05%
ROIC/WACC0.74
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-7.35%
EPS Next 2Y0.44%
EPS Next 3Y4.07%
EPS Next 5Y6.07%
Revenue 1Y (TTM)1.46%
Revenue growth 3Y-3%
Revenue growth 5Y-7.56%
Sales Q2Q%3.52%
Revenue Next Year2.29%
Revenue Next 2Y1.83%
Revenue Next 3Y1.76%
Revenue Next 5Y2.18%
EBIT growth 1Y0.41%
EBIT growth 3Y-2.47%
EBIT growth 5Y-3.83%
EBIT Next Year97.55%
EBIT Next 3Y28.51%
EBIT Next 5Y17.76%
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%