Should I Buy AT&T (T)? Finance YouTuber Analysis

The YouTuber owns a small position in AT&T, having bought it around $18 per share. He holds it for its dividend and views it as a long-term buy-and-hold, despite it not being a 'sexy company,' and monitors it closely.

“AT&T I still hold. It pays a dividend. It's doing its thing. It's not a terribly sexy company, but it is an interesting from a interesting company from a long-term buy and hold standpoint.”

The YouTuber recommends TASC US as a buy, highlighting its consistent profitability, low P/E ratio of 25.9 for a small-cap company, and strong financial story with improving margins and consistent cash flow. Despite a past dip due to Meta's policy change, analysts forecast over 34% upside.

“This is one of the few gems that is making a consistent profit and they have a relatively low P toe ratio of 25.9 and they are still considered a small cap company at under $2 billion market cap”

The YouTuber recommends AT&T due to its low price-to-earnings multiple of 9.7 and increasing free cash flow, driven by a more focused business after divesting non-core assets. He believes the telecom industry is now an oligopoly, leading to more stable pricing and margins, making AT&T a sticky business with good value despite its debt.

“AT&T like a lot of other telecom companies that spent billions of dollars on spectrum and building out a 5G network is now starting to increase the amount of cash flow coming from the business the current price to earnings multiple is just 9.7.”

Travis Hoium recommends buying AT&T due to its attractive 6.8% dividend yield and strong free cash flow generation. He argues the company is exiting a heavy investment phase and entering a cash generation phase, evidenced by rising operating cash flow and decreasing capital expenditures. The low price-to-earnings multiple of 6.6 and the essential nature of wireless services further reduce downside risk, while potential for debt reduction and service bundling offer upside.

“I think the investment phase that they're exiting and the cash flow generation phase that they're going into right now is really attractive time to buy a stock like AT&T not only for the dividend but for the long-term cash flow growth.”

The analyst sees AT&T as a good buy, similar to Verizon, with a 7.8% dividend yield. He believes the company, now more focused after asset divestitures, will benefit from its 5G investments through increased pricing power and new use cases, despite its high debt, leading to long-term growth.

“I think similar businesses and probably belong in a basket if you're interested in these two stocks.”

The analyst recommends AT&T as a long-term buy, citing its 7.8% dividend yield and a forward price-to-earnings multiple of 5.8. He expects increased free cash flow as 5G infrastructure spending winds down, which can be used to pay down debt or return capital to shareholders. Despite significant debt, its strong market position and essential services make it appealing.

“I just still think that's too good to pass up even if there's some downside from falling cash flows or maybe they cut their dividend in the future to lower the debt load I still think these are two really attractive stocks because of their dominant position in the tens of billions of dollars that they have put into the ground building out their 5G networks”

The YouTuber recommends buying AT&T, highlighting its 7.7% dividend yield and improving financial metrics. He points out that AT&T, like Verizon, has reduced capital spending and increased cash from operations in the second quarter, strengthening its ability to pay dividends and reduce debt. The telecommunications industry's pricing power and the shift from investment to harvesting 5G network returns are cited as key drivers for sustained cash flow.

“The seven and a half eight percent dividend right now is actually a really great buy for investors who just want to buy a stock and just collect that dividend quarter after quarter.”

Travis Hoium views the recent sell-off in AT&T shares, driven by concerns over lead cables, as a potential buying opportunity. He argues that the lead liability is likely overstated and that the company's capital expenditures for 5G buildout are set to decrease, which should improve free cash flow and financial position over the next couple of years. The current valuation, despite appearing high, is considered attractive given the expected operational improvements.

“from an investment standpoint I think this is potentially a buying opportunity”

The analyst suggests avoiding AT&T in favor of Verizon, citing AT&T's consistently poorer return on assets and a history of making less optimal acquisition decisions. Although AT&T shows slightly better free cash flow margin after dividends compared to Verizon, its overall financial efficiency and strategic choices make it a less attractive long-term investment.

“TNT consistently makes poor decisions on things like acquisitions so as a result Verizon's just going to be able to generate a little bit better return on those assets.”

Hoium suggests AT&T as a long-term buy, citing its role in the telecommunications oligopoly, strong cash flow, and a 5.6% dividend yield. He emphasizes the stickiness of mobile plans, growth in connected devices, and the potential for bundling services with fixed wireless and content, leading to steady revenue growth.

“I think these businesses are much stickier than a lot of investors think because it's very difficult to change your mobile plan and over time people are adding more and more devices”

The YouTuber expresses significant concern about AT&T's history of poor capital allocation, citing large acquisitions like Time Warner and DirecTV that destroyed shareholder value. Despite the core telecommunications business being a 'cash cow,' management's repeated mistakes with multi-billion dollar losses and a high debt load (136 billion dollars) make it a risky investment. They question the company's ability to make better decisions going forward, especially with a leaner cash position and rising interest rates.

“every time I look at ATT I go gosh what are they going to do next what are they going to do to mess up the balance sheet and incur some sort of multi-billion dollar loss next”

The YouTuber advises avoiding AT&T due to its history of poor management decisions, particularly overpaying for acquisitions like DirecTV and Warner Media, which ultimately resulted in significant losses. Unlike Verizon, AT&T has not focused on its core mobile business, leading to a lack of growth and competitive disadvantage. Despite a new CEO, the past strategic missteps make it a less attractive investment compared to peers.

“it's just a history of poor decisions I don't really see where the the growth is”

The YouTuber is bullish on AT&T, noting its low price-to-earnings multiple (under 10) and over 7% dividend yield, despite significant debt. He argues that the market is overlooking the potential for growth through 5G home internet and strategic bundling with streaming services, which could enhance revenue and margins. While acknowledging debt as a concern, he anticipates improved cash flow as large spectrum expenditures subside, facilitating debt reduction.

“I like the high dividend yield in this current market environment but don't sleep on these companies as potential growth opportunities as 5G proliferates across the country.”

The YouTuber suggests AT&T for short-term upside, despite general negativity on the telecom sector. He notes improved cash flow, moderated investment spending, and a lower debt burden compared to Verizon, making its 6.5% dividend more sustainable. Although the dividend was cut in 2022, the current payout is considered sustainable, and the stock has a potential triple-digit return to a high target of $109 per share.

“It might seem weird to put AT&T ticker t on the list but there could be some short short-term upside in this stock.”

While the YouTuber holds AT&T shares and finds it preferable to Verizon due to slightly better cash flow metrics, he would not recommend buying it at this point. He highlights concerns about the company's ability to cover its dividend from operating cash flow after capital expenditures, noting it has to issue debt or shares to fund the dividend, which he views as unsustainable.

“So you can see at T has been a complete dog from my portfolio and while I do like it over Verizon the cash flow metrics a little bit better at ATT I wouldn't recommend it at this point over others on this list”

The analyst recommends avoiding AT&T due to the potential for massive litigation costs related to lead cables, which could amount to tens of billions of dollars. While AT&T is in a better financial position than Verizon with a lower payout ratio and ability to conserve cash by cutting share repurchases, the overall overhang from potential lawsuits makes it a risky investment for now.

“I would avoid both of them until a big multi-state States attorney's General litigation is an ounce that could drop the shares possibly and maybe even for a while afterwards eventually that could be a buying opportunity but could overhang these stocks for years to come”

The analyst suggests AT&T is one to watch due to its renewed focus on its core telecom business after divesting non-core assets, leading to healthy wireless growth and strong customer additions. He highlights its six percent dividend yield, which is now well-covered by earnings (45% payout ratio), and expects dividend growth to resume. The company's fiber business expansion also contributes to its cash-generating potential.

“The new Focus back on Telecom and a six percent dividend makes this one one to watch again.”

AT&T is favored over Verizon due to its return to a pure-play telecom focus after the Warner Brothers spin-off. The company shows strong net subscriber growth and a 5.7% dividend yield with more room for growth, as it pays out only 45% of earnings compared to Verizon's 55%, and has stronger revenue growth.

“AT&T is back to its roots as a pure play Telecom after that Warner Brothers spin-off and I think the investors are underestimating the strengths in this stock.”

The analyst prefers AT&T over Verizon, citing AT&T's stronger revenue growth momentum, improving profitability trends, and a more attractive valuation with a lower payout ratio. The renewed focus on its core telecom business after spinning off other segments is also seen as a positive catalyst for future performance.

“I have to give the edge to AT&T on this one first on that lower valuation and the lower payout ratio.”

The YouTuber is buying AT&T due to its new business focus and a 5.9% dividend yield. He notes that despite past underperformance, the stock is now rebounding, making it an attractive dividend play.

“I made a video in 2018 to warn investors about at t ticker t and the shares have gone nowhere but down since then but but this new business focus has me buying the stock I bought in late december after the spinoff for that 5.9 dividend and a rebounding stock price”

The YouTuber, who previously disliked AT&T, recently bought shares due to its transformation into a pure-play telecom carrier after shedding Time Warner and DirecTV assets. He expects the company to focus on debt reduction and sees potential for increased dividend growth, similar to Verizon, with analysts projecting significant upside.

“I actually picked up the shares in January after years of hating on this stock... it's paying down a big chunk of its debt with the spin-off proceeds and and is going to be more focused team now.”

The YouTuber recently went bullish on AT&T, buying shares for its long-term dividend and value. The company is selling off acquisitions to reduce debt, which had previously put the dividend at risk. With telecom subscriber numbers stabilizing and a focus on 5G, the company is expected to become more manageable, and analysts project a 25% upside to $30 per share, on top of a strong post-merger dividend yield of around 4.5%.

“the number one dividend stock investors are watching shares of a t ticker t with more than 6 700 views and almost a thousand investors watching this stock”

The YouTuber advises selling AT&T due to its massive debt load from acquisitions like DirecTV and Time Warner, which failed to boost sales growth effectively. He highlights that management's strategy of buying growth with debt, especially when previous deals aren't integrated, rarely works and ultimately burdens shareholders.

“selling a stock if it reaches my fair value estimate is the least often reason i use this is where that idea of active investing comes in though having that process you can use to value a stock whether it's with some of the ratios we talk about on the channel or other measures re-evaluate your stocks maybe once or twice a year and decide what that fair value is”

The analyst is bullish on AT&T, noting that the significant expenses for 5G spectrum are likely to decrease, leading to higher earnings and cash flow as 5G revenue starts to materialize. He believes sales and earnings are bottoming out for telecom stocks, making valuations attractive.

“stocks like at ts and verizon have been crushed over the last year because they had to spend tens of billions of dollars paying for that 5g spectrum but but i think that's about to change soon they're not going to have those expenses in this next year and will start booking the revenue on 5g and that's going to mean higher earnings and cash flow”

The YouTuber, despite past skepticism, now sees AT&T as a deep value play with an 8.7% dividend yield. He acknowledges a potential dividend cut but argues it's already priced in, expecting at least a 5% yield post-cut. He highlights its 0.95x price-to-sales, 18.6% operating margin, and anticipates improved profitability as 5G expenses decrease and revenue builds, projecting a 25% price upside.

“this stock is now in deep value territory it's paying a very strong dividend”

The YouTuber, despite past skepticism, now finds AT&T attractive due to its current valuation, trading at just 7.4 times earnings, a 25% discount to Verizon. Third-quarter earnings showed a rebound in wireless and streaming, and management is addressing past strategic errors. The 8.4% dividend yield is consistent.

“This is still the largest communications company in the world and the valuation is now looking pretty attractive third quarter earnings showed a rebound in wireless business along with growth in that streaming service management is finally owning up to the mistakes in its prior strategy and the shares trade for just 7.4 times on that price to earnings basis.”

The analyst recommends AT&T as a long-term buy, citing its transformation into a pure-play wireless communication business post-spin-off. He believes it is well-priced at $20 per share, offering a 13% internal rate of return based on conservative free cash flow projections, or a 26% IRR if the company achieves its stated free cash flow guidance of $20 billion. The company also offers a strong dividend yield of 5.7%.

“I think it's well priced both because if I use the average free cash flow per share it's 13 if I use the the price estimate that they have which is the 20 billion dollars it's a 26 percent irr.”

The analyst believes AT&T, post-spin-off, is a well-priced investment with a conservative long-term growth forecast. He projects a 13% internal rate of return based on his free cash flow estimates, or a 26% IRR if the company achieves its own guidance of $20 billion in free cash flow. The company meets his five key investment attributes, including strong free cash flow and reasonable debt levels, making it a good long-term, conservative investment.

“I think it's a good investment. They're going to be paying a strong dividend, it's currently yielding 5.7 percent, and I think it's a good long-term investor for someone who just wants a kind of conservative, the original subscription model based business.”