AT&T INC (T) Stock Fundamental Analysis
NYSE:T - New York Stock Exchange, Inc. - US00206R1023 - Common Stock - Currency: USD
Overall T gets a fundamental rating of 4 out of 10. We evaluated T against 31 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 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.
In the past 5 years T always reported a positive cash flow from operatings.
1.2 Ratios
T has a better Return On Assets (2.72%) than 66.67% of its industry peers.
T has a better Return On Equity (10.30%) than 73.33% of its industry peers.
With a decent Return On Invested Capital value of 5.28%, T is doing good in the industry, outperforming 70.00% 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 5.68%.
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
The Profit Margin of T (8.78%) is better than 73.33% of its industry peers.
T's Profit Margin has improved in the last couple of years.
T has a Operating Margin of 19.74%. This is in the better half of the industry: T outperforms 73.33% of its industry peers.
In the last couple of years the Operating Margin of T has grown nicely.
T has a Gross Margin (59.77%) which is in line with its industry peers.
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
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
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 0.87. 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 of 0.87. This is comparable to the rest of the industry: T outperforms 53.33% 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 has a better Debt to FCF ratio (6.67) than 76.67% 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 has a Debt to Equity ratio of 1.13. This is comparable to the rest of the industry: T outperforms 50.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 1.13 | ||
| Debt/FCF | 6.67 | ||
| Altman-Z | 0.87 |
ROIC/WACC0.75
WACC7.06%
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 worse Current ratio (0.66) than 83.33% 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.
Looking at the Quick ratio, with a value of 0.62, T is doing worse than 80.00% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.66 | ||
| Quick Ratio | 0.62 |
3. Growth
3.1 Past
T shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -6.22%.
T shows a decrease in Earnings Per Share. Measured over the last years, the EPS has been decreasing by -8.79% yearly.
T shows a decrease in Revenue. In the last year, the revenue decreased by -0.08%.
Measured over the past years, T shows a decrease in Revenue. The Revenue has been decreasing by -7.56% on average per year.
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
The Earnings Per Share is expected to grow by 5.51% 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 1.94% on average per year.
EPS Next Y-8.06%
EPS Next 2Y0.65%
EPS Next 3Y4.2%
EPS Next 5Y5.51%
Revenue Next Year1.41%
Revenue Next 2Y1.39%
Revenue Next 3Y1.46%
Revenue Next 5Y1.94%
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.
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
Based on the Price/Earnings ratio of 11.76, the valuation of T can be described as reasonable.
Based on the Price/Earnings ratio, T is valued a bit cheaper than 73.33% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 29.43, T is valued rather cheaply.
The Price/Forward Earnings ratio is 12.79, which indicates a correct valuation of T.
73.33% of the companies in the same industry are more expensive than T, based on the Price/Forward Earnings ratio.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.65, T is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.76 | ||
| Fwd PE | 12.79 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of T indicates a somewhat cheap valuation: T is cheaper than 66.67% of the companies listed in the same industry.
T's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 10.3 | ||
| EV/EBITDA | 6.96 |
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 2Y0.65%
EPS Next 3Y4.2%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 4.24%, T is a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 4.82, T pays a bit more dividend than its industry peers.
T's Dividend Yield is rather good when compared to the S&P500 average which is at 2.27.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.24% |
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.
T has decreased its dividend 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 2Y0.65%
EPS Next 3Y4.2%
26.57
-0.08 (-0.3%)
Chartmill FA Rating
GICS SectorCommunication Services
GICS IndustryGroupTelecommunication Services
GICS IndustryDiversified Telecommunication Services
Earnings (Last)
Earnings (Next)
Inst Owners63.96%
Inst Owner Change-88.57%
Ins Owners0.06%
Ins Owner Change2.63%
Market Cap190.67B
Analysts79.44
Price Target27.11 (2.03%)
Short Float %1.22%
Short Ratio2.36
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 4.24% |
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)7.43%
PT rev (3m)20.63%
EPS NQ rev (1m)-13.12%
EPS NQ rev (3m)-11.99%
EPS NY rev (1m)-8.22%
EPS NY rev (3m)-9%
Revenue NQ rev (1m)-0.14%
Revenue NQ rev (3m)-0.19%
Revenue NY rev (1m)0.2%
Revenue NY rev (3m)-0.05%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 11.76 | ||
| Fwd PE | 12.79 | ||
| P/S | 1.56 | ||
| P/FCF | 10.3 | ||
| P/OCF | 4.92 | ||
| P/B | 1.83 | ||
| P/tB | N/A | ||
| EV/EBITDA | 6.96 |
EPS(TTM)2.26
EY8.51%
EPS(NY)2.08
Fwd EY7.82%
FCF(TTM)2.58
FCFY9.71%
OCF(TTM)5.4
OCFY20.33%
SpS17.05
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
WACC7.06%
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-8.06%
EPS Next 2Y0.65%
EPS Next 3Y4.2%
EPS Next 5Y5.51%
Revenue 1Y (TTM)-0.08%
Revenue growth 3Y-3%
Revenue growth 5Y-7.56%
Sales Q2Q%0.86%
Revenue Next Year1.41%
Revenue Next 2Y1.39%
Revenue Next 3Y1.46%
Revenue Next 5Y1.94%
EBIT growth 1Y-2.1%
EBIT growth 3Y-2.49%
EBIT growth 5Y-3.84%
EBIT Next Year97.94%
EBIT Next 3Y28.38%
EBIT Next 5Y17.5%
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%