AT&T: Strong Buy With A 6 P/E And A 7% Dividend

Summary:

  • AT&T’s stock has been battered, dropping by about 25% over the last year.
  • However, AT&T stock’s technical image is improving. Moreover, at about six times earnings, the stock is beyond dirt cheap now.
  • AT&T has surpassed EPS estimates in its last ten quarters, and the trend should continue, leading to higher-than-expected earnings in the coming years.
  • Modest EPS growth and multiple expansion could propel AT&T’s stock considerably in future years.

AT&T Stock Jumps On Strong Earnings Report

Brandon Bell

AT&T (NYSE:T) may not be the most exciting company. However, the bottom must be close when I see a 7% dividend and a 6.4 P/E ratio. Given the economic uncertainty, the slowdown effect, and other factors, AT&T’s share price has dropped by approximately 25% over

T

T (StockCharts.com)

EPS estimates

EPS Estimates (seekingalpha.com)

EPS surprises

EPS Surprises (seekingalpha.com)

Year 2023 2024 2025 2026 2027 2028 2029
Revenue Bs $122.5 $124.8 $128 $131 $134 $137.5 $140.5
Revenue growth 1.5% 1.9% 2.56% 2.45% 2.33% 2.46% 2.22%
EPS $2.50 $2.65 $2.78 $2.92 $3.04 $3.19 $3.32
EPS growth N/A 6% 5% 5% 4% 5% 4%
Forward P/E 5.66 7 8 10 11 12 11
Stock price $15 $19.50 $23.36 $30.40 $35.09 $39.84 $45


Analyst’s Disclosure: I/we have a beneficial long position in the shares of T either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

I am long a diversified portfolio with hedges.

Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.


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