AT&T Stock Analysis: Is AT&T a Dividend Stock to Buy at 3-Decade Lows?! NYSE: T Stock

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In this AT&T (NYSE: T) stock analysis we go through AT&T's dividend, debt, lead cables issues, recent developments and more before preparing a valuation for the stock and talking about my conclusions and expectations.

After falling to the lowest prices in 3 decades and recovering a bit, AT&T still offers a very attractive 6.8% dividend today.

But, following massive investments in the 5G auction, worries about lead cables, a lot of debt, high interest rates and so on, let’s see if this really is that attractive.

Depending on the CAPEX, AT&T can produce around 18, 20 to even $25 billion or more. This, for a $120 billion market cap is generally and even relative to Verizon, very cheap.

They recently had some cost savings and a couple of spin-offs - including from Warner Media or WBD now. Now, the company is focused more on the telecom services part, which is relatively stable and generally a pretty defensive industry, which is great for a dividend stock.

They have $36.5 billion in current assets, which is not enough to cover the current liabilities, but with the normal cash flows, refinancing and stuff that they normally do, they should be fine. The rest of the assets, even without the goodwill, cover all the liabilities so, overall they are OK, actually very similar to Verizon.

Now, probably the number one issue people have with this company is the $137 billion in debt.

However, it’s very important to look into when they have to pay it. We can see upcoming maturities of 7.5, then 5.4, then 10, then 6, 7 billion and so on and they even have a few maturities in the 90s. Since they make around $20 billion per year, none of these maturities should be an issue, and there is also potential for refinancing if they really need it.

The debt generates around $6 to $7 billion per year in interest but, if they keep decreasing it, that should increase the profit and cash flow in the future.

The dividend yield is around 6.5%, meaning about $8 billion, plus any future increase.

This, for a $20 billion cash flow, is actually very sustainable, and the other $12 billion are more than enough to cover the debt, so this is a very good position to be in. I think some buybacks would’ve been very good at this price, even if it was 2-3%.


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DISCLAIMER: I am not a financial advisor and nothing on this channel should qualify as investing advice. All information is provided for your education or entertainment. It is not intended to be investment advice. This information is general in nature and has not taken into account your personal financial position or objectives. Seek a duly licensed professional for investment advice.

0:00 AT&T (NYSE: T) Stock Review
0:20 AT&T Financial Analysis, debt, dividend, risk-reward & more
3:45 AT&T Valuation + Conclusions

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