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 5 out of 10 to T. T was compared to 32 industry peers in the Diversified Telecommunication Services industry. T has an excellent profitability rating, but there are 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
T had positive earnings in the past year.
In the past year T had a positive cash flow from operations.
The reported net income has been mixed in the past 5 years: T reported negative net income in multiple years.
In the past 5 years T always reported a positive cash flow from operatings.
1.2 Ratios
T's Return On Assets of 2.72% is fine compared to the rest of the industry. T outperforms 71.88% of its industry peers.
T's Return On Equity of 10.30% is fine compared to the rest of the industry. T outperforms 78.13% of its industry peers.
With a decent Return On Invested Capital value of 5.28%, T is doing good in the industry, outperforming 71.88% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for T is in line with the industry average of 5.49%.
The 3 year average ROIC (5.19%) for T is below the current ROIC(5.28%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.72% | ||
| ROE | 10.3% | ||
| ROIC | 5.28% |
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
Looking at the Profit Margin, with a value of 8.78%, T is in the better half of the industry, outperforming 75.00% of the companies in the same industry.
T's Profit Margin has improved in the last couple of years.
T's Operating Margin of 19.74% is fine compared to the rest of the industry. T outperforms 75.00% of its industry peers.
T's Operating Margin has improved in the last couple of years.
T has a Gross Margin (59.77%) which is comparable to the rest of the industry.
T's Gross Margin has improved in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 19.74% | ||
| PM (TTM) | 8.78% | ||
| GM | 59.77% |
OM growth 3Y0.52%
OM growth 5Y4.02%
PM growth 3Y-16.01%
PM growth 5Y2.75%
GM growth 3Y2.85%
GM growth 5Y2.22%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so T is destroying value.
T has more shares outstanding than it did 1 year ago.
The number of shares outstanding for T has been reduced compared to 5 years ago.
Compared to 1 year ago, T has an improved debt to assets ratio.
2.2 Solvency
Based on the Altman-Z score of 0.87, we must say that T is in the distress zone and has some risk of bankruptcy.
T has a Altman-Z score of 0.87. This is in the better half of the industry: T outperforms 62.50% of its industry peers.
T has a debt to FCF ratio of 6.67. This is a slightly negative value and a sign of low solvency as T would need 6.67 years to pay back of all of its debts.
T's Debt to FCF ratio of 6.67 is fine compared to the rest of the industry. T outperforms 75.00% of its industry peers.
T has a Debt/Equity ratio of 1.13. This is a high value indicating a heavy dependency on external financing.
T's Debt to Equity ratio of 1.13 is in line compared to the rest of the industry. T outperforms 53.13% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.13 | ||
| Debt/FCF | 6.67 | ||
| Altman-Z | 0.87 |
ROIC/WACC0.75
WACC7.05%
2.3 Liquidity
T has a Current Ratio of 0.66. 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 Current ratio of 0.66. This is amonst the worse of the industry: T underperforms 81.25% of its industry peers.
T has a Quick Ratio of 0.66. 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's Quick ratio of 0.62 is on the low side compared to the rest of the industry. T is outperformed by 78.13% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.66 | ||
| Quick Ratio | 0.62 |
3. Growth
3.1 Past
The earnings per share for T have decreased by -6.22% in the last year.
The Earnings Per Share has been decreasing by -8.79% on average over the past years.
The Revenue has decreased by -0.08% 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)-6.22%
EPS 3Y-12.73%
EPS 5Y-8.79%
EPS Q2Q%0%
Revenue 1Y (TTM)-0.08%
Revenue growth 3Y-3%
Revenue growth 5Y-7.56%
Sales Q2Q%0.86%
3.2 Future
Based on estimates for the next years, T will show a small growth in Earnings Per Share. The EPS will grow by 4.72% on average per year.
T is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.27% yearly.
EPS Next Y-8.02%
EPS Next 2Y0.97%
EPS Next 3Y4.48%
EPS Next 5Y4.72%
Revenue Next Year1.32%
Revenue Next 2Y1.37%
Revenue Next 3Y1.49%
Revenue Next 5Y2.27%
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
With a Price/Earnings ratio of 11.96, the valuation of T can be described as very reasonable.
Based on the Price/Earnings ratio, T is valued a bit cheaper than 68.75% of the companies in the same industry.
When comparing the Price/Earnings ratio of T to the average of the S&P500 Index (28.13), we can say T is valued rather cheaply.
A Price/Forward Earnings ratio of 13.00 indicates a correct valuation of T.
Based on the Price/Forward Earnings ratio, T is valued a bit cheaper than 75.00% of the companies in the same industry.
When comparing the Price/Forward Earnings ratio of T to the average of the S&P500 Index (21.03), we can say T is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.96 | ||
| Fwd PE | 13 |
4.2 Price Multiples
62.50% of the companies in the same industry are more expensive than T, based on the Enterprise Value to EBITDA ratio.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of T is on the same level as its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.48 | ||
| EV/EBITDA | 7.02 |
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 2Y0.97%
EPS Next 3Y4.48%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.21%, T is a good candidate for dividend investing.
T's Dividend Yield is a higher than the industry average which is at 5.32.
T's Dividend Yield is rather good when compared to the S&P500 average which is at 2.57.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.21% |
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.
The dividend of T decreased recently.
Dividend Growth(5Y)-10.97%
Div Incr Years0
Div Non Decr Years1
5.3 Sustainability
T pays out 76.38% of its income as dividend. This is not a sustainable payout ratio.
DP76.38%
EPS Next 2Y0.97%
EPS Next 3Y4.48%
27.02
-0.48 (-1.75%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupTelecommunication Services
GICS IndustryDiversified Telecommunication Services
Earnings (Last)
Earnings (Next)
Inst Owners63.96%
Inst Owner Change0.03%
Ins Owners0.06%
Ins Owner Change0.52%
Market Cap193.95B
Analysts80
Price Target27.51 (1.81%)
Short Float %1.59%
Short Ratio2.72
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.21% |
Yearly Dividend1.15
Dividend Growth(5Y)-10.97%
DP76.38%
Div Incr Years0
Div Non Decr Years1
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)4.77%
Min EPS beat(2)3.5%
Max EPS beat(2)6.05%
EPS beat(4)3
Avg EPS beat(4)1.92%
Min EPS beat(4)-2.25%
Max EPS beat(4)6.05%
EPS beat(8)6
Avg EPS beat(8)0.88%
EPS beat(12)9
Avg EPS beat(12)1.85%
EPS beat(16)13
Avg EPS beat(16)3.18%
Revenue beat(2)0
Avg Revenue beat(2)-1.94%
Min Revenue beat(2)-2.71%
Max Revenue beat(2)-1.17%
Revenue beat(4)0
Avg Revenue beat(4)-2.45%
Min Revenue beat(4)-3.57%
Max Revenue beat(4)-1.17%
Revenue beat(8)0
Avg Revenue beat(8)-1.99%
Revenue beat(12)0
Avg Revenue beat(12)-3.73%
Revenue beat(16)0
Avg Revenue beat(16)-7.9%
PT rev (1m)1.11%
PT rev (3m)9.01%
EPS NQ rev (1m)-0.74%
EPS NQ rev (3m)-13.54%
EPS NY rev (1m)0.05%
EPS NY rev (3m)-8.17%
Revenue NQ rev (1m)-0.12%
Revenue NQ rev (3m)-0.27%
Revenue NY rev (1m)-0.09%
Revenue NY rev (3m)0.06%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.96 | ||
| Fwd PE | 13 | ||
| P/S | 1.59 | ||
| P/FCF | 10.48 | ||
| P/OCF | 5 | ||
| P/B | 1.86 | ||
| P/tB | N/A | ||
| EV/EBITDA | 7.02 |
EPS(TTM)2.26
EY8.36%
EPS(NY)2.08
Fwd EY7.69%
FCF(TTM)2.58
FCFY9.54%
OCF(TTM)5.4
OCFY19.99%
SpS17.04
BVpS14.54
TBVpS-12.73
PEG (NY)N/A
PEG (5Y)N/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 2.72% | ||
| ROE | 10.3% | ||
| ROCE | 6.94% | ||
| ROIC | 5.28% | ||
| ROICexc | 5.33% | ||
| ROICexgc | 12.33% | ||
| OM | 19.74% | ||
| PM (TTM) | 8.78% | ||
| GM | 59.77% | ||
| FCFM | 15.13% |
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)6.26%
ROICexcg growth 3Y9.18%
ROICexcg growth 5Y-1.64%
ROICexc growth 3Y4.24%
ROICexc growth 5Y2.34%
OM growth 3Y0.52%
OM growth 5Y4.02%
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 | 1.13 | ||
| Debt/FCF | 6.67 | ||
| Debt/EBITDA | 2.65 | ||
| Cap/Depr | 98.46% | ||
| Cap/Sales | 16.56% | ||
| Interest Coverage | 3.39 | ||
| Cash Conversion | 86.68% | ||
| Profit Quality | 172.23% | ||
| Current Ratio | 0.66 | ||
| Quick Ratio | 0.62 | ||
| Altman-Z | 0.87 |
F-Score7
WACC7.05%
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)-6.22%
EPS 3Y-12.73%
EPS 5Y-8.79%
EPS Q2Q%0%
EPS Next Y-8.02%
EPS Next 2Y0.97%
EPS Next 3Y4.48%
EPS Next 5Y4.72%
Revenue 1Y (TTM)-0.08%
Revenue growth 3Y-3%
Revenue growth 5Y-7.56%
Sales Q2Q%0.86%
Revenue Next Year1.32%
Revenue Next 2Y1.37%
Revenue Next 3Y1.49%
Revenue Next 5Y2.27%
EBIT growth 1Y-2.1%
EBIT growth 3Y-2.49%
EBIT growth 5Y-3.84%
EBIT Next Year97.88%
EBIT Next 3Y28.35%
EBIT Next 5Y17.72%
FCF growth 1Y-9.54%
FCF growth 3Y-11.18%
FCF growth 5Y-8.74%
OCF growth 1Y1.19%
OCF growth 3Y-2.6%
OCF growth 5Y-4.45%