Is AT&T a good income stock?
AT&T is facing challenges and may not grow briskly, but investors seeking income might want to consider it: The stock recently sported a hefty dividend yield of 6.6%. Burdened with long-term debt, AT&T cut its dividend nearly in half in 2022 and has kept it steady since then.
The stock's low valuation and high yield also provide some protection for option traders who are concerned about the downside risk. However, AT&T is not a compelling value play that can offer significant capital growth in the near future.
Second, AT&T offers a generous dividend yield of 6.66%, which is much higher than the average yield of short-term government bonds (4.8%), telecom stocks (4.65%), and S&P 500 stocks (1.84%). This means that AT&T can provide you with a steady income stream that beats most alternatives.
In the third quarter of 2023, AT&T reported revenue of $30.4 billion, a 1% increase compared to the same period a year prior. This growth is partly attributed to the company's expanding customer base, which has doubled to over 8 million subscribers in less than four years.
How much is AT&T's dividend? T pays a dividend of $0.28 per share. T's annual dividend yield is 6.53%. When is AT&T ex-dividend date?
AT&T stock was up Tuesday after a Wolfe Research analyst cited multiple reasons as to why he believes the telecommunications company is a solid, long-term investment.
AT&T has one of the highest dividends in the S&P 500, with a trailing-12-month yield of around 6.7%. Unfortunately, part of the reason the dividend yield is so high is because AT&T's stock price has been falling. Regardless, AT&T's lucrative dividend is appealing to investors seeking consistent income.
Main takeaways: AT&T Stock Forecast 2024-2030
Most analysts see AT&T stock trading in a range of $18-28 per share through 2024 as competitive pressures persist. Forecasts from Gov Capital predict AT&T stock will hit $32 by mid-2025, driven by 5G network expansion, fiber/HBO Max growth, and debt reduction.
2024 Outlook
For the full year, AT&T expects: Wireless service revenue growth in the 3% range. Broadband revenue growth of 7%+. Adjusted EBITDA* growth in the 3% range.
Fair Value Estimate for AT&T Stock
In total, we believe consolidated revenue can grow 2%-3% annually over the next five years. With stable wireless margins and an opportunity to improve consumer fixed-line profitability, we expect consolidated EBITDA will grow slightly faster than revenue, in the 3%-4% range.
Is AT&T stock dividend safe?
This is great news for dividend investors as AT&T pays approximately $8 billion in cash dividends over the full year. Not only does that suggest the dividend is safe, but there may even be room for an increase down the road.
Consider AT&T stock
Due to improving business conditions, the low valuation makes AT&T a compelling buy. Thanks to a rising market share and the AI-driven need for AT&T's networks, the company and its stock should move higher in the long term.
AT&T stock price stood at $17.12
According to the latest long-term forecast, AT&T price will hit $20 by the middle of 2025 and then $25 by the end of 2026. AT&T will rise to $30 within the year of 2028, $35 in 2029, $40 in 2031 and $45 in 2034.
| Year | Payment Date | Amount |
|---|---|---|
| 2024 | 02-01-24 | $0.2775 |
| 2023 | 11-01-23 | $0.2775 |
| 08-01-23 | $0.2775 | |
| 05-01-23 | $0.2775 |
The board of directors of AT&T* (NYSE:T) today declared a quarterly dividend of $0.2775 per share on the company's common shares. The board of directors also declared quarterly dividends on the company's 5.000% Perpetual Preferred Stock, Series A and the company's 4.750% Perpetual Preferred Stock, Series C.
| Stock | Dividend yield |
|---|---|
| Enbridge Inc. (ENB) | 7.6% |
| Ecopetrol SA (EC) | 14.6% |
| United Parcel Service Inc. (UPS) | 4.2% |
| OneMain Holdings Inc. (OMF) | 8.3% |
First, AT&T is trading at an exceptionally low forward-looking price-to-earnings ratio of less than 7, while the average telecom stock has a multiple of 14.5 and the average S&P 500 stock trades at 21.4 times projected earnings. AT&T stock thus appears undervalued compared to its peers and the market as a whole.
Verizon's superior FCF puts it in a stronger position than AT&T to continue reducing debt and maintain its dividend. Verizon's FCF increase is thanks in part to growth in its wireless-service sales, which hit $76.7 billion in 2023, a year-over-year increase of 3.2%.
AT&T Stock Forecast
The 16 analysts with 12-month price forecasts for AT&T stock have an average target of 20.22, with a low estimate of 14 and a high estimate of 29. The average target predicts an increase of 15.84% from the current stock price of 17.46.
| Name | Hold | Shares |
|---|---|---|
| Vanguard Group Inc | 8.70% | 622,406,459 |
| Blackrock Inc | 7.46% | 533,547,330 |
| State Street Corp | 4.28% | 305,826,819 |
| Newport Trust Company LLC | 2.79% | 199,272,812 |
Is T Mobile better than AT&T?
We've gotta say, T-Mobile has an edge on AT&T when it comes to unlimited plans. Its two lower-tier phone plans both cost five dollars less per month compared to AT&T's corresponding plans. You also get a fixed amount of premium data on the Essentials plan, which you don't get with AT&T.
| Stock | Expected Change in Stock Price* |
|---|---|
| Tesla Inc. (TSLA) | 61% |
| Mastercard Inc. (MA) | 14.2% |
| Salesforce Inc. (CRM) | 7.2% |
| Advanced Micro Devices Inc. (AMD) | 11.3% |
AT&T Stock Prediction 2030
In 2030, the AT&T stock will reach $ 14.94 if it maintains its current 10-year average growth rate. If this AT&T stock prediction for 2030 materializes, T stock will grow -12.73% from its current price.
For now at least, analysts are anticipating S&P 500 earnings growth will continue to accelerate in the first half of 2024. Analysts project S&P 500 earnings will grow 3.9% year-over-year in the first quarter and another 9% in the second quarter.
The pessimism that's been weighing AT&T stock down for years appears to finally be lifting. If the company can maintain solid growth rates for its wireless and fiber internet businesses, the rally over the past six months could be just the beginning of a major recovery for AT&T stock.
