AT&T's Dividend Yield Gap With 10-Year Treasury Yield Increases Rapidly

Summary

• AT&T’s dividend yield is below 4% and has a significant gap with the 10-year treasury yield, which can limit the attractiveness for income investors.
• T stock has delivered a strong bull run in the last few quarters, but the upside could be limited due to modest yield and few growth drivers.
• Long-term buy-and-hold strategy might not work with AT&T stock, with the stock showing lower total returns than S&P 500 for every five plus year investment horizon in the last 30 years.
• AT&T’s fiber revenue reported 19% YoY growth in recent quarter and a steady decline in net debt to adj EBITDA ratio to 2.63X.
• Forward PE ratio for fiscal year ending Dec 2027 is 11.33 but potential capex headwinds make the stock a Hold at current price.

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AT&T (NYSE:T) stock has been able to weather the recent tariff volatility relatively well. The latest earnings result also showed revenue beating estimates by $264 million, which has helped the sentiment. However, AT&T’s dividend yield is now below 4% and there is a big gap

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. 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.