AT&T is one
of the world’s largest telecommunications companies. The company has grown profits and dividends
at a 5% pace over the past five years earning approximately 10-12% return on
equity. T went through a rough period (2008-2011)
as the growth of its traditional wireline business slowed and margins came
under pressure. Looking forward profits
should regain momentum as a result of:
(1) momentum in both is wireline and wireless businesses,
(2)
building the most technologically advanced digital
networks systems in the industry. It
will include voice, video and internet in a vast wireline (U-verse) and
wireless infrastructure and has resulted in increased penetration of both the
business and household markets,
(3)
acquisitions,
Negatives:
(1) intense competition,
(2) growth in
voice over IP,
(3) highly
regulated industry,
(4) loss of its
exclusive hold on iPhone.
T is rated A++
by Value Line, carries a 33% debt to equity ratio and its stock yields 5.3%.
Statistical Summary
Stock Dividend Payout # Increases
Yield Growth Rate Ratio Since 2003
T 5.3% 3% 69 9
Debt/ EPS Down Net Value Line
Equity ROE Since 2003 Margin Rating
T 33% 14% 4 11% A++
*many companies in T industry do
not pay a dividend
Chart
Note:
T stock made good progress off its March 2009 low, quickly surpassing the
downtrend off its May 2008 high (red line) and the November 2008 trading high
(green line). Long term, T is in an
uptrend (straight blue lines).
Intermediate term, it is in an uptrend (purple lines). Short term, it is in an uptrend (brown
lines). The wiggly blue line is on
balance volume. The High Yield Portfolio
owns a full position in T. The upper
boundary of its Buy Value
Range Sell Half
Range
4/13
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