Is It Too Late to Buy AT&T? A Timely Investment Analysis

As AT&T Inc. (T) continues to expand its 5G network and fiber infrastructure, investors may be wondering if it's too late to buy the telecommunications giant. With a high dividend yield and a history of consistent dividend payments, AT&T has long been an attractive investment for income-focused investors. However, the company's recent financial performance and growth prospects have raised concerns about the sustainability of its dividend and the potential for future growth.

AT&T's dividend history and yield have contributed significantly to its appeal as an investment. As of 2025-02-01, the company has an annual dividend of $1.11 per share, with a yield of 4.68%. This high yield is attractive to investors seeking a steady income stream. However, the company's negative dividend growth rate over the past three and five years (-18.50% and -7.60% respectively) raises concerns about the potential for stagnant or declining dividend growth. Additionally, AT&T's payout ratio is not applicable as of 2023-09-30, which may indicate that the company is not retaining a significant portion of its earnings for future growth and unexpected downturns.



Furthermore, AT&T's revenue and earnings growth rates have been underperforming compared to its global competitors. The company's 3-year revenue growth rate is approximately -13.60%, and its 3-year EPS growth rate is approximately -4.90%. These negative growth rates may impact the company's ability to sustain its dividend payments in the long term. Additionally, AT&T's 5-year EBITDA growth rate was -14.90%, which underperforms approximately 91.43% of global competitors. This negative EBITDA growth rate further emphasizes the company's struggling financial performance.

However, AT&T's strategic acquisitions and investments, such as its 5G network expansion and fiber buildout, play a crucial role in driving future growth and enhancing shareholder value. The company's 5G network is expected to drive innovation and create new economic opportunities across various industries, such as retail, healthcare, and manufacturing. By investing in 5G, AT&T is poised to unlock new use cases and create significant new economic opportunities, ultimately enhancing shareholder value.

Moreover, AT&T's fiber buildout is critical for supporting the growing demand for data and enabling the company's 5G network. Fiber provides a robust backbone for wireless networks, ensuring that AT&T's customers have the best possible pathway back to the internet. By expanding its fiber network, AT&T is not only addressing the connectivity needs of underserved areas but also positioning itself to capture a larger share of the broadband market, ultimately driving future growth and enhancing shareholder value.

In conclusion, while AT&T's dividend history and yield have contributed to its appeal as an investment, the company's negative dividend growth rate and challenging growth metrics may raise concerns about the long-term sustainability of its dividend payments. Investors should weigh the high yield against the potential for stagnant or declining dividend growth, as well as the company's ability to reverse the negative trends in revenue and earnings. However, AT&T's strategic acquisitions and investments in its 5G network expansion and fiber buildout play a crucial role in driving future growth and enhancing shareholder value. By pursuing these strategic investments, AT&T is well-positioned to continue delivering value to its shareholders.