AT&T Inc. (NYSE:T ) Citi's 2024 Global TMT Conference September 5, 2024 3:50 PM ET Company Participants Jenifer Robertson - Executive Vice President & General Manager Conference Call Participants Michael Rollins - Citi Michael Rollins This session is for Citi clients only, and disclosures are available at the back of the room next to the AV desk. Well, welcome back to Citi's 2024 Global TMT Conference.
AT&T Inc. (NYSE:T ) Bank of America's 2024 Media, Communications and Entertainment Conference September 5, 2024 8:00 AM ET Company Participants Pascal Desroches - CFO Conference Call Participants David Barden - Bank of America David Barden All right, everybody. Thank you for joining us.
Telecom operator AT&T has presented the Communications Workers of America's bargaining committee with its final offer, the union said on Thursday, adding that the proposal did not meet its expectations.
AT&T Inc. (T, Financial) has shown notable resilience during the recent market turmoil, with the stock steadily climbing and almost matching the S&P 500's performance. After years of underperformance, its shares are finally on an upward trajectory, highlighted by a 5.20% surge following the announcement of second-quarter results.
AT&T (T) and Verizon (VZ) have much in common. They are both the biggest telecommunication companies in the US, pay substantial dividends to their investors, and have a huge debt burden.
The Communications Workers of America (CWA) have informed AT&T and the Federal Mediation and Conciliation Service that it would no longer be a part of the mediation, as the union argues that the company has used this process to stall negotiations, it said in a statement on Monday.
Verizon offers a higher dividend yield, but both stocks offer a cash return far exceeding the S&P 500. Both companies carry heavy debts, though Verizon's debt burden is higher in relative and absolute terms.
AT&T's new cash flow pattern, post-divestiture of noncore businesses, is underappreciated and could boost the stock price due to seasonal cash flow increases. The company is transitioning. Newer business like 5G should eventually predominate. Despite potential seasonal dips, the long-term outlook is positive if management sustains single-digit growth.
AT&T is growing customers and revenue in its core businesses of mobile phone service and fiber-optic internet. The firm is reducing its debt burden, and increasing its free cash flow.
AT&T's high dividend yield (5.6%) understates its upside potential. Because the dividend is only part of shareholder yield, and other parts include share buybacks and debt paydowns. In particular, shares repurchased at discounts are in essence a wealth transfer from the existing shareholders to the staying shareholders.
During times of turbulence and uncertainty in the markets, many investors turn to dividend-yielding stocks. These are often companies that have high free cash flows and reward shareholders with a high dividend payout.
AT&T's stock valuation was updated using a dividend discount model, yielding fair values between $16 and $26 per share based on different dividend growth scenarios. Key concerns include AT&T's significant debt and the impact of interest rate changes on refinancing costs and dividend growth potential. Compared to Verizon, AT&T is less attractive due to less consistent dividend growth, despite being a viable dividend investment candidate.