AT&T's stock value has not increased in 10 years, with stagnation and dilution expected to continue.

AT&T shares have declined over the last 10 years, with stagnation and dilution continuing. The company's struggles have been attributed to too much debt and a lack of growth in its core business. The stock's performance has been disappointing, and investors have been left wondering if the company will ever regain its former glory.

AT&T Inc. (NYSE: T) has been a subject of concern for investors over the past decade, with its shares experiencing stagnation and dilution. The company's struggles have been primarily attributed to excessive debt and a lack of growth in its core business. This article delves into the factors contributing to AT&T's underperformance and assesses the outlook for the stock.

Over the past 10 years, AT&T has faced significant challenges, including too much debt and a competitive wireless smartphone landscape. The company's debt overhang has been a major impediment to future operating growth. According to a 2025 earnings announcement, AT&T's debt per share remains high at $18.48, similar to levels seen in 2015 [1]. This debt load has hindered the company's ability to invest in growth opportunities and has led to a negative tangible book value of -$12.70 per share [1].

In addition to debt, AT&T has struggled with stagnant sales and earnings. The company's earnings, sales, and dividends per share have all declined since 2016, with the number of shares outstanding increasing by around 30% through acquisitions [1]. This dilution has further eroded shareholder value. The company's valuation is also considered expensive, with the stock trading at a pricey 12.2x earnings multiple, 1.6x sales multiple, and 4.9x cash flow multiple [1].

Despite these challenges, AT&T has maintained a dividend yield of 4% to 8% on average. However, this yield is now less attractive due to the recent price increase in the stock, making it comparable to short-term to intermediate-term Treasuries [1]. The free cash flow yield of 9.68% is also below average for new AT&T stock buyers when adjusted for CPI inflation [1].

Technical indicators also suggest that the stock's momentum may be fading. The Accumulation/Distribution Line and On Balance Volume have shown signs of weakness, indicating that price gains may be limited in the coming months [1].

Looking ahead, analysts project a small drop in cash EPS this year, followed by a tepid rebound in 2026-27, assuming no recession [1]. However, the dividend yield may be reduced in a deep recession scenario, further eroding the stock's appeal to income investors.

In conclusion, AT&T shares have experienced stagnation and dilution over the past decade, primarily due to excessive debt and a lack of growth in its core business. The stock's valuation is expensive, and its dividend yield is no longer attractive compared to risk-free cash investments. Given these factors, investors may want to consider alternative investment opportunities.

References:
[1] https://seekingalpha.com/article/4812455-at-and-t-shares-lower-than-10-years-ago-stagnation-and-dilution-may-continue