I believe AT&T is a stock worth looking into at this valuation.
There is so much focus on debt and what price was paid for Time Warner, that people seem to forget what portion of company earnings actually come from TWX.
Despite subscriber loss and a great deal of debt, I believe AT&T to be a buy at these prices.
A purchase at these valuations has the potential to deliver a 15-18% annual rate of return over the coming 3-5 years.
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AT&T: An undervalued giant gone mixed media worth a second look
In this article, I’m taking a deeper look at the Telecommunications giant AT&T (T). I believe the stock is currently undervalued, and I will show why I believe the company’s perceived troubles, from the point of view of an international dividend investor, will have little impact with regard to the appeal of the company share in the long run. I will show why I believe this current valuation creates an opportunity that I’ve taken advantage of and, provided they fall further, will continue to take advantage of by increasing my position.
As a dividend investor, I’m about three things that have made me financially independent and FIRE-capable.
- Buying good dividend-paying companies at good (low valuation) prices.
- Buying more of the same good companies at lower or at least fair price points.
- Never sell a stock.
I invest in a multitude of nations, including Sweden, Denmark, Norway, Finland, Germany, France, UK, Canada, USA, and others, being that I am a Swedish national. This gives my portfolio a great deal of diversity (some would argue too much), and the companies I look at and articles I write may cover companies most in NA know very little about.
Some of the inspiration for my portfolio comes from the Government Pension Fund of Norway, with regards to company and country diversity when it comes to stocks. I have no “maximum number of companies”, and I don’t mind having very small positions next to positions of tens of thousands of dollars. Much of my investment style are things I’m trying to learn from people like Chuck Carnevale and like-minded investors, some here on Seeking Alpha.
I want to emphasize that my personal prerequisites may differ from your own. I reached what I consider to be financial independence (my average monthly dividends are higher than my average monthly expenses) in 2018. I currently invest in two ways. My private investment account, holding 98% of my total stocks as well as a savings account for uninvested cash, and a corporate investment account where I invest surplus capital leftover from my Swedish limited company after corporate costs and these investments due to tax reasons.
This may or may not influence my investment decisions and the risk I’m willing to take on. I still work, but I run my own consulting business and work ‘as I want’. Consider my advice with this in mind and make your own investment decisions.
That being said, let’s get going.
Let’s look at AT&T!
AT&T needs no introduction, being the telecommunications giant gone mixed media company with a 30+ year streak of dividend increases. The company, much like similar companies all over the western world, is currently in the initial phases of building their 5G network, with availability already being rolled out into several American cities.
The purchase of Time Warner (TWX) burdened the company with a great deal of debt, but not without at the same time granting a lot of synergies as well. Apart from the calculated, $1.5B, we’re looking at among other things, a not inconsiderable amount of corporate tax benefits. Continue reading here…
Source: Seeking Alpha