☎️AT&T is the world's largest telecommunications company, providing fixed and cellular communications services in the USA and a number of other countries. The company underwent a significant transformation last year, which had a positive impact on its financial results. However, its shares are still trading at an attractive valuation and offer a high level of dividend yield. The fair value of AT&T stocks is $19.72, upside is 22.6%. Dividend yield – 6.96%.
Investment thesis
🔼 Cheap valuation. For the 4Q2023 AT&T showed revenue growth of 2.2% y/y to $32 bln. This was facilitated by an increase in the number of subscribers. Adjusted earnings per share decreased from $0.61 to $0.54. At the same time, the company increased free cash flow in 4Q2023 by 4.4% to $6.4 bln, and for the full year by 7% y/y to $38.3 bln. This indicator is of particular interest for a dividend stock. AT&T is valued at just 7.4 expected annual earnings, which is significantly below the industry average (12.75) and also below its own 5-year average (8.3).
🔼 Dividends. AT&T offers a fairly high dividend yield. At current quotes it is near 7%. Even though the Fed's rate cut has been delayed, it is still expected to be cut before the end of the year. In such a situation, it is beneficial for the investor to lock in a high level of dividend yield.
To open a brokerage account with Unibank Invest, please fill out the application form or contact us at +374 43 004 382.
‼ Disclaimer
The information is only indicative, is not exhaustive and is provided solely for discussion purposes. The information should not be regarded as a public offer, request or invitation to purchase or sell any securities, financial instruments or services. No guarantees in direct or indirect form, including those stipulated by law, are provided in connection with the specified information and materials. The information presented above cannot be considered as a recommendation for investing funds, as well as guarantees or promises of future profitability of investments. The risk of negative consequences as a result of the use of the above recommendations, opinions and statements is fully borne by the addressee of the information.
Unibank” OJSC is regulated by the Central Bank of Armenia.