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AT&T: Dividend Sustainable, Growth Prospects Strong

Summary

AT&T is a telecommunications company providing consumers services in voice, data, messaging and digital TV.

AT&T, unlike its competitor Verizon, has two main factors driving its growth - Mexican expansion and DirectTV. In addition, it is doing very well in its postpaid plans despite competition.

Investors may do well layering into positions at around $37.50 per share, despite high valuations.

Company Introduction

AT&T (NYSE:T) is a telecommunications services provider giving consumers services in voice, messaging, data and postpaid TV services. AT&T is facing fierce competition from value competitors, T-mobile and Sprint, but the company is doing a great job adding customers through its paid TV services. Its future is bright, but its valuation is slightly expensive. As a result, the author recommends purchasing AT&T on further price drop (to around $37 per share), especially given that the Federal Reserve will raise rates later this year.

Company Key Facts

Share price: $39.00 per share

Market cap: $210 billion

Dividend: $0.48 per share

Latest earnings: pre-tax $3.0 billion during Q2 2016

North American Postpaid Wireless

AT&T is doing phenomenally well in its postpaid wireless segment despite tough competition, adding a net of 1.4 million new...


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