Thoughts on T (ATT)

By onthefly71, May 28, 2018

Wanted to get irregulars take on ATT. The stock is currently trading more or less near the bottom of a longer term range, after missing analysts estimates.

It’s got a decent dividend, and I’m considering taking a long term IRA position that I’d add to on further weakness.

The risks as I can see them are

1) loss of customers to cheaper rivals (T Mobile).

2) loss of subscribers to its Direct TV arm, as people switch to cheaper streaming options.

2) uncertainty in the legal outcome of its Bid to buy Time Warner.

The risks are not immaterial imo- I know many folks at work etc who have cancelled their Cable and or satellite TV service. Mainly millennials who are savvy enough to stream and/ or illegally get their content (altered Fire stick TV etc), or retirees who are just cost cutting period.

However ATT is a giant and right now at this level is sporting a nice yield.

I know it trades more like a utility, and there is also the impact rising rates could have on its share price.

Still, I don’t see ATT or Verizon going out of business anytime soon, and this seems like a decent entry point for T, a usually stable stock/company.

Anyone own it or considering?

Thanks in advance

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I can see the temptation here on T – however, a cursory look shows a PE of 10 for now and the near future. The dividend is better than that of VZ, but the outlook of T does not look as good. You might consider trying options to pick up shares at a lower price, which seems to be the likely scenario at this time.
My cell experience showed me ATT had better coverage in rural areas; VZ had better coverage in densely populated areas.

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onthefly71
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onthefly71

Thanks for the input

aaronyrf
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I have owned T since 2009 and I will definitely add more here on this latest pullback. They are positioning themselves to be less and less reliant on mobile (which is, lets face it, stagnant) as representative by their purchases of Direct TV and soon to be Comcast. Right now they are still kinda just considered a “mobile phone” provider (which they are) but moving forward I think they are going to shed that image and become much more.

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R Gum
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R Gum

Bumping this topic as I am tempted to take a bite at T right now.
Time Warner is done last Dec…and FCF of $29B in 2019 makes me think having distribution AND media makes sense.
Any thoughts?

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