AT&T Inc (T)
AT&T Inc. (T) is a holding company that provides telecommunication, media, and technological services across the planet. It primarily focuses on the US market, although most of its segments do operate globally in some capacity. It recently decoupled from WarnerMedia which has since announced a merger with Discovery, however, it’s important to note that AT&T will still retain a majority stake in the new company. As a result of this decoupling and AT&T’s first financial results as a solo company, mentions of the stock have increased by 93.55%, leading investors to wonder if AT&T is a good investment. It’s currently trading at 19.51, a 1.67% YTD increase.
Is AT&T a Good Investment? - Positives
With AT&T refocusing its efforts on its internet & telecommunications services, many investors are wondering whether it's a good time to buy AT&T stock. To help our readers make an informed decision, we’ve included a few of the biggest positives to adding the telecommunications giant to your portfolio.
AT&T has been gaining traction versus its competitors, adding 691,000 postpaid phones to its numbers. This is especially relevant as over the same period, Verizon lost 36,000 postpaid phone connections, showing many customers are likely making the switch from Verizon to AT&T.
As we touched on, despite AT&T moving away from WarnerMedia, it still retains a majority stake in the company. Therefore, the company will still be profiting heavily from HBO’s massive 13 million subscriber increase.
Seemingly, AT&T’s efforts to focus on telecommunications have been paying off as the company grew its wireless revenue by 5.5% to $20.1 billion, alongside a massive 21% increase in its fiber customers.
Here at HypeIndex, we’re always fond of a good dividend stock. They provide much needed regular cash flow; something I’m sure few investors would complain about. AT&T currently offers a massive 5.7% dividend yield, beating out Verizon’s offering of 4.7% by about 21%.
Verizon is AT&T’s biggest competitor, the two companies have in abttle for market share for years, so anything negatively impacting Verizon tends to be good for AT&T. Recently, Goldman Sachs analyst Brett Feldman dropped his rating on Verizon from buy to neutral. This is due to AT&T improving its financials and growing its user base while Verizon has been bleeding customers. Currently, AT&T trades for around 8.2 times 12-month earnings, versus Verizon at 9.8 times earnings. It’s expected that over the next few months these figures will become far closer as AT&T slowly steals market share away from Verizon.
Is AT&T a Good Investment? - Negatives
Like any investment, AT&T has its problems. To help you decide on whether AT&T is right for you, we’ve included a couple of reasons why it might be better to steer clear of AT&T.
As a result of AT&T refocusing and divesting, its revenue fell by 13% year on year. While a revenue decline was expected following AT&T's reshuffling, a double-digit hit is never good.
Despite AT&T making a clear effort to increase its customers across most segments, it still suffered from a net loss of approximately 20,000 broadband & DSL subscribers.
Hype Asset of the Day - Conclusion
All in all, AT&T is looking rather strong following its break-away from WarnerMedia, DirectTV, Viro, & Xandr, The company boasts solid financials, plenty of free cash, and a management team that’s preparing for the future. Based on current figures, it seems likely that AT&T will overtake Verizon if both companies stay on their current trajectories, something that would no doubt significantly boost AT&T’s share price. If you’re looking for a long-term investment with minimal downside, & impressive dividends, AT&T seems like a pretty good bet right now. If you’d like to get updates on trending stocks directly to your inbox, check out our premium plans. Or if you want to know a bit more about the services offered by HypeIndex, check out our FAQ page.
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