The AT&T Absurdity: Yield Higher Than PE

Sep. 12, 2022 9:38 AM ETAT&T Inc. (T) StockVZ, T125 Comments

Summary

  • Extreme negative market sentiment has brought AT&T to an absurd position: its FY PE is 6.7x while its TTM dividend yield stands at 7.87%.
  • There are undoubtedly headwinds and restructuring uncertainties ahead as the company streamlines its operation post the WarnerMedia spinoff.
  • However, long-term investors should take note of its growth and recovery potential.
  • These shares are projected to deliver double-digit annual returns in the next 5 years even under my conservative estimates.
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Thesis

Market sentiment occasionally creates absurd situations, especially at its greed or fear extreme. AT&T (NYSE:T) is currently at the fear extreme, and its FY PE of 6.7x is so compressed that it is lower than its TTM dividend

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This article was written by

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Envision Research, aka Lucas Ma, has over 20+ years of investment experience and holds a Masters with in Quantitative Investment and a PhD in Mechanical Engineering with a focus on renewable energy, both from Stanford University. He also has 30+ years of hands-on experience in high-tech R&D and consulting, housing sector, credit sector, and actual portfolio management.

He leads the investing group Envision Early Retirement along with Sensor Unlimited where they offer proven solutions to generate both high income and high growth with isolated risks through dynamic asset allocation. Features include: two model portfolios - one for short-term survival/withdrawal and one for aggressive long-term growth, direct access via chat to discuss ideas, monthly updates on all holdings, tax discussions, and ticker critiques by request.

Analyst’s Disclosure:I/we have a beneficial long position in the shares of VZ either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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