AT&T is an American Telcom company. Wireless communication remains AT&T’s largest business, contributing nearly 40% of revenue. As the second- largest U.S. wireless carrier, AT&T connects more than 100 million devices, including 63 million postpaid and 16 million prepaid phone customers. The consumer and entertainment segment (about 25% of revenue) includes the consumer fixed-line and DirecTV satellite television businesses, serving 20 million television and 14 million Internet access customers. WarnerMedia now contributes a bit less than 20% of revenue with media assets that include HBO, the Turner cable networks, and the Warner Brothers studios. Fixed-line business communications (14%), Latin American satellite television (2%), and Mexican wireless services (1%) constitute the remainder of the firm.
Charts
The first retest is a buying opportunity, second retest is okay, third retest is warning. It is below the 200 daily and weekly SMA suggesting a downtrend is in progress.
On to the numbers…
Statistics
| Year | 2010 | 2011 | 2012 | 2013 | 2014 |
| ROIC | 8.2% | 6.9% | 5.7% | 13.8% | 6.6% |
| Sales (MUSD) | 124280 | 126723 | 127434 | 128752 | 132447 |
| EPS (USD) | 3.35 | 0.66 | 1.25 | 3.39 | 1.19 |
| Equity per share (USD) | 18.94 | 17.85 | 16.61 | 17.5 | 16.76 |
| Cash Flow from operating activities (MUSD) | 15692 | 14633 | 19711 | 13852 | 10139 |
| P/E | 5.62 | 31.17 | 19.98 | 7.78 | 22.44 |
| Year | 2015 | 2016 | 2017 | 2018 | 2019 |
| ROIC | 8.7% | 7.3% | 6.4% | 6.9% | 5.4% |
| Sales (MUSD) | 146801 | 163786 | 160546 | 170756 | 181193 |
| EPS (USD) | 2.37 | 2.1 | 4.67 | 2.85 | 1.89 |
| Equity per share (USD) | 20.12 | 20.22 | 23.13 | 26.63 | 27.84 |
| Cash Flow from operating activities (MUSD) | 16662 | 16926 | 17363 | 22844 | 29233 |
| P/E | 14.52 | 20.35 | 8.17 | 9.94 | 20.57 |
Growth rates
| Yearly average | 10 year | 5 year | 1 year |
| ROIC | 8% | 7% | 5% |
| Sales Growth Rate | 4% | 5% | 6% |
| EPS Growth Rate | -6% | -6% | -34% |
| Equity Growth Rate | 4% | 8% | 5% |
| Cash Flow Growth Rate | 7% | 15% | 28% |
Calculations using historic growth rates and different P/E
| Historical Equity Growth rate x 2 | Average P/E | Median P/E | |
| P/E | 8 | 16.1 | 17.25 |
| Calculated Future price in 10 years | 22 | 45 | 48 |
| Calculated price (fair value) | 6 | 11 | 12 |
| Margin of Safety (50%) | 3 | 5.5 | 6 |
Current price: 29.23 USD
AT&T is a popular dividend stock. The price is at support and may seem cheap. The growth rates above are alright but the stock is overpriced. I’ll wait and may reevaluate if it goes on sale.