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 34 industry peers in the Diversified Telecommunication Services industry. While T belongs to the best of the industry regarding profitability, there are concerns on its financial health. T is cheap, but on the other hand it scores bad on growth.
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 Return On Assets of 3.49%. This is in the better half of the industry: T outperforms 79.41% 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 85.29% 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 76.47% 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 5.93%.
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 82.35% 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.
T has a better Operating Margin (20.15%) than 82.35% of its industry peers.
T's Operating Margin has improved in the last couple of years.
The Gross Margin of T (59.06%) is better than 61.76% 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
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
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 0.71, we must say that T is in the distress zone and has some risk of bankruptcy.
The Altman-Z score of T (0.71) is worse than 64.71% of its industry peers.
T has a debt to FCF ratio of 6.71. This is a slightly negative value and a sign of low solvency as T would need 6.71 years to pay back of all of its debts.
T has a Debt to FCF ratio of 6.71. This is in the better half of the industry: T outperforms 79.41% of its industry peers.
T has a Debt/Equity ratio of 1.24. This is a high value indicating a heavy dependency on external financing.
T has a Debt to Equity ratio of 1.24. This is comparable to the rest of the industry: T outperforms 52.94% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.24 | ||
| Debt/FCF | 6.71 | ||
| Altman-Z | 0.71 |
ROIC/WACC0.83
WACC6.59%
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.
T has a worse Current ratio (0.71) than 82.35% of its industry peers.
A Quick Ratio of 0.67 indicates that T may have some problems paying its short term obligations.
The Quick ratio of T (0.67) is worse than 82.35% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.71 | ||
| Quick Ratio | 0.67 |
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%.
The Earnings Per Share has been decreasing by -7.30% on average over the past years.
The Revenue has been growing slightly by 1.40% in the past year.
T shows a decrease in Revenue. Measured over the last years, the Revenue has been decreasing by -6.44% yearly.
EPS 1Y (TTM)-8.73%
EPS 3Y-8.83%
EPS 5Y-7.3%
EPS Q2Q%-9.52%
Revenue 1Y (TTM)1.4%
Revenue growth 3Y-5.06%
Revenue growth 5Y-6.44%
Sales Q2Q%-0.4%
3.2 Future
T is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 1.22% yearly.
T is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 1.42% yearly.
EPS Next Y-5.92%
EPS Next 2Y-1.5%
EPS Next 3Y0.41%
EPS Next 5Y1.22%
Revenue Next Year0.7%
Revenue Next 2Y0.92%
Revenue Next 3Y0.95%
Revenue Next 5Y1.42%
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.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 8.27 indicates a reasonable valuation of T.
Based on the Price/Earnings ratio, T is valued cheaply inside the industry as 97.06% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 24.29. T is valued rather cheaply when compared to this.
Based on the Price/Forward Earnings ratio of 8.13, the valuation of T can be described as reasonable.
Based on the Price/Forward Earnings ratio, T is valued cheaper than 97.06% of the companies in the same industry.
T's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 20.35.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.27 | ||
| Fwd PE | 8.13 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, T is valued a bit cheaper than the industry average as 70.59% of the companies are valued more expensively.
88.24% of the companies in the same industry are more expensive than T, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 6.66 | ||
| EV/EBITDA | 6.17 |
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-1.5%
EPS Next 3Y0.41%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 5.79%, T is a good candidate for dividend investing.
T's Dividend Yield is a higher than the industry average which is at 5.12.
Compared to an average S&P500 Dividend Yield of 2.29, T pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.79% |
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
T pays out 57.33% of its income as dividend. This is a bit on the high side, but may be sustainable.
DP57.33%
EPS Next 2Y-1.5%
EPS Next 3Y0.41%
AT&T INC
NYSE:T (7/26/2024, 3:52:52 PM)
After market: 18.999 -0.01 (-0.06%)19.01
-0.18 (-0.94%)
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 Cap136.30B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 5.79% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
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EPS beat(8)
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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)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 8.27 | ||
| Fwd PE | 8.13 | ||
| 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)
High Growth Momentum
Growth
EPS 1Y (TTM)-8.73%
EPS 3Y-8.83%
EPS 5Y
EPS Q2Q%
EPS Next Y-5.92%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)1.4%
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