AT&T adds 300M shares to buyback authorization


After accounting for the 125M shares remaining under its March 2013 authorization, AT&T (T +0.7%) is free to buy back up to 425M shares (~8% of outstanding shares). (PR)

Ma Bell has slowed down its once-torrid buyback pace in recent quarters: It spent $1.9B on buybacks in Q4, even with Q3 but down from $3.3B in Q2 and $5.9B in Q1.

Though AT&T has attributed its slowed buyback pace to network investments, softening free cash flow could also be a factor. FCF is expected to fall to $11B in 2014 from 2013's $13.6B and 2012's $19.5B. Capex is expected to total $21B, down slightly from 2013's $21.2B and up from 2012's $19.7B.

AT&T's dividend yield is currently at 5.2%. The carrier says it expects to maintain a net-debt-to-adjusted-EBITDA ratio in the 1.8 range or lower.

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Comments (12)
  • Tradevestor
    , contributor
    Comments (5014) | Send Message
     
    Love it. Amazing yield plus buyback.
    31 Mar 2014, 09:54 AM Reply Like
  • peapaw
    , contributor
    Comments (1237) | Send Message
     
    Good news for (T) investors. Possible stock price appreciation and a good dividend in a very stable company. I'll take those odds.
    31 Mar 2014, 10:10 AM Reply Like
  • tomdgascop
    , contributor
    Comments (96) | Send Message
     
    Stock buybacks can be great for stockholders if done because that is the best use of cash and the price is right. However, watch out of financial slight of hand that seeks to cover up weak ratios or poorly managed employee stock option plans.
    31 Mar 2014, 10:15 AM Reply Like
  • Stock_doc
    , contributor
    Comments (359) | Send Message
     
    Rather have the cash with more dividend growth, but no complaints.
    31 Mar 2014, 11:48 AM Reply Like
  • TCG,llc
    , contributor
    Comments (464) | Send Message
     
    It's about time and sorely needed by T as stock appreciation has been stagnant for over a decade (never rising above $40 mark). However, there are concerns that this is no more than an attempt to mask forecasted stresses on revenue due to increase competition and rapid deterioration of revenue derived from wireline services. Can T produce real value or additional value to it's investors (other than the institutional investors) beyond dividend payout?
    31 Mar 2014, 12:04 PM Reply Like
  • financeminister
    , contributor
    Comments (1228) | Send Message
     
    I was debating whether to buy (T) for my Roth IRA when it was at 32 and yielded a descent 5% yield. Since then, it has appreciated over 8%. I don't hold any telecommunications stock as a holding to reduce volatilty for my portoflio but I feel I missed a good oppertunity to have a position in telecommunications - good cashflow for a sustianable dividend and less volatility.

     

    I started a position in (OHI) instead which was at it's lows and yielding 6.1% at the time. Don't regret that buy but I regret not allocating more cash for (T)

     

    Lesson learnt... will wait for $32/share if I'm to start a position again.
    31 Mar 2014, 01:04 PM Reply Like
  • TCG,llc
    , contributor
    Comments (464) | Send Message
     
    I would caution against the former in favor of the latter (avoid the volatility with T). For several reasons which may contradict your primary reason as over the past 3 months T has ranged from $32 -$35; over the past year T has ranged from $32 - $35; over the past 5 years T has ranged from $20 to $35 and finally over the past 10 years T has ranged from $15-$35. Now, keep in mind that T over the past 5 to 10 years endured a number of high profile mergers and acquisitions of baby bells and the old "Ma Bell" where SBC is the parent only taken the brand name of Ma Bell. So, almost immediately significant appreciation of the company's stock followed that period; however, since then the stock has remained below 40$ principally between $32 and $35. Need I say stable with a pretty good dividend payout (although as of late unable to increase along historical lines-underperforming). Unless you see higher upside to T against mounting competition within industry, uncertainty from blurred lines of competing and collateral industry, and constraints on existing revenue streams, I would search elsewhere for a position within Telecom.
    31 Mar 2014, 01:22 PM Reply Like
  • Bdouvikas
    , contributor
    Comments (22) | Send Message
     
    or you can go with VOX and get exposure to a basket of telecom
    31 Mar 2014, 02:29 PM Reply Like
  • peapaw
    , contributor
    Comments (1237) | Send Message
     
    Disagree, by your own admissions (T) has remained stable, and so far established a pattern as far as price over the last 10 years which according to market standards is boringly stable. AT&T will never appreciate to the extent of the market, nor will it depreciate like the market. Also you need to look at their dividend 2008-2009. It remained at $.40 per share throughout the worst recession since the great depression. Glad I own it.
    31 Mar 2014, 09:58 PM Reply Like
  • 1GreatCFA
    , contributor
    Comments (1362) | Send Message
     
    "I would search elsewhere for a position within Telecom" example Vodafone.
    31 Mar 2014, 02:20 PM Reply Like
  • smurf
    , contributor
    Comments (6391) | Send Message
     
    T seems a bit bondlike. Not a bad thing altogether. Going ex-dividend soon, for shareholders as of 4/10. Buy in to get the dividend, or wait for the announcement dip?
    31 Mar 2014, 10:40 PM Reply Like
  • TCG,llc
    , contributor
    Comments (464) | Send Message
     
    smurf ~ I didn't want to say that but indeed your observations are correct that T behaves just like a bond, yet it's market strategy is to be a innovative industry leader? Like it or not, competition is getting stiff within Telecom and many of the largest face challengers to maintain revenue levels, especially considering the constraints with older wireline services.
    1 Apr 2014, 03:13 AM Reply Like
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