AT&T INC (T)
US00206R1023 - Common Stock
We assign a fundamental rating of 5 out of 10 to T. T was compared to 33 industry peers in the Diversified Telecommunication Services industry. T has an excellent profitability rating, 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
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.
T had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With a decent Return On Assets value of 3.15%, T is doing good in the industry, outperforming 78.79% of the companies in the same industry.
T's Return On Equity of 11.89% is amongst the best of the industry. T outperforms 87.88% of its industry peers.
T has a Return On Invested Capital of 5.43%. This is in the better half of the industry: T outperforms 78.79% of its industry peers.
T had an Average Return On Invested Capital over the past 3 years of 5.09%. This is in line with the industry average of 6.10%.
The 3 year average ROIC (5.09%) for T is below the current ROIC(5.43%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 3.15% | ||
| ROE | 11.89% | ||
| ROIC | 5.43% |
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 better Profit Margin (10.25%) than 84.85% of its industry peers.
T's Profit Margin has been stable in the last couple of years.
Looking at the Operating Margin, with a value of 20.07%, T is in the better half of the industry, outperforming 78.79% 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 59.61%, T is in the better half of the industry, outperforming 60.61% 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 | 20.07% | ||
| PM (TTM) | 10.25% | ||
| GM | 59.61% |
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.
T has about the same debt/assets ratio as last year.
2.2 Solvency
Based on the Altman-Z score of 0.81, we must say that T is in the distress zone and has some risk of bankruptcy.
With a Altman-Z score value of 0.81, T perfoms like the industry average, outperforming 45.45% of the companies in the same industry.
T has a debt to FCF ratio of 6.22. This is a slightly negative value and a sign of low solvency as T would need 6.22 years to pay back of all of its debts.
T has a better Debt to FCF ratio (6.22) than 81.82% of its industry peers.
A Debt/Equity ratio of 1.19 is on the high side and indicates that T has dependencies on debt financing.
Looking at the Debt to Equity ratio, with a value of 1.19, T is in line with its industry, outperforming 51.52% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.19 | ||
| Debt/FCF | 6.22 | ||
| Altman-Z | 0.81 |
ROIC/WACC0.79
WACC6.87%
2.3 Liquidity
A Current Ratio of 0.70 indicates that T may have some problems paying its short term obligations.
Looking at the Current ratio, with a value of 0.70, T is doing worse than 75.76% of the companies in the same industry.
A Quick Ratio of 0.66 indicates that T may have some problems paying its short term obligations.
The Quick ratio of T (0.66) is worse than 75.76% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.7 | ||
| Quick Ratio | 0.66 |
3. Growth
3.1 Past
T shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -8.87%.
T shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -7.30% yearly.
Looking at the last year, T shows a small growth in Revenue. The Revenue has grown by 0.26% in the last year.
Measured over the past years, T shows a decrease in Revenue. The Revenue has been decreasing by -6.44% on average per year.
EPS 1Y (TTM)-8.87%
EPS 3Y-8.83%
EPS 5Y-7.3%
EPS Q2Q%-6.25%
Revenue 1Y (TTM)0.26%
Revenue growth 3Y-5.06%
Revenue growth 5Y-6.44%
Sales Q2Q%-0.45%
3.2 Future
The Earnings Per Share is expected to grow by 1.22% on average over the next years.
Based on estimates for the next years, T will show a small growth in Revenue. The Revenue will grow by 1.42% on average per year.
EPS Next Y-6.34%
EPS Next 2Y-2.67%
EPS Next 3Y-0.91%
EPS Next 5Y1.22%
Revenue Next Year0.24%
Revenue Next 2Y0.84%
Revenue Next 3Y1.01%
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.
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 10.17 indicates a reasonable valuation of T.
Based on the Price/Earnings ratio, T is valued cheaper than 87.88% 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 28.65.
Based on the Price/Forward Earnings ratio of 10.06, the valuation of T can be described as reasonable.
Compared to the rest of the industry, the Price/Forward Earnings ratio of T indicates a rather cheap valuation: T is cheaper than 90.91% of the companies listed 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 23.56.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 10.17 | ||
| Fwd PE | 10.06 |
4.2 Price Multiples
T's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. T is cheaper than 75.76% of the companies in the same industry.
69.70% 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 | 7.86 | ||
| EV/EBITDA | 6.6 |
4.3 Compensation for Growth
T has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)N/A
PEG (5Y)N/A
EPS Next 2Y-2.67%
EPS Next 3Y-0.91%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.99%, T is a good candidate for dividend investing.
T's Dividend Yield is a higher than the industry average which is at 5.08.
T's Dividend Yield is rather good when compared to the S&P500 average which is at 2.23.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.99% |
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 65.27% of its income as dividend. This is not a sustainable payout ratio.
DP65.27%
EPS Next 2Y-2.67%
EPS Next 3Y-0.91%
AT&T INC
NYSE:T (11/21/2024, 5:05:00 PM)
After market: 22.95 -0.03 (-0.13%)22.98
+0.15 (+0.66%)
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 Cap164.89B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.99% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
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Min EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
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EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
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Revenue beat(16)
Avg Revenue beat(16)
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 | 10.17 | ||
| Fwd PE | 10.06 | ||
| 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 | 3.15% | ||
| ROE | 11.89% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 20.07% | ||
| PM (TTM) | 10.25% | ||
| GM | 59.61% | ||
| 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 Turnover0.31
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.19 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.7 | ||
| Quick Ratio | 0.66 | ||
| 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)-8.87%
EPS 3Y-8.83%
EPS 5Y
EPS Q2Q%
EPS Next Y-6.34%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)0.26%
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