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AT&T Inc. (T), General Motors Company (GM): Crucial Junctures May Offer Opportunity to These Companies

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AT&T Inc. (NYSE:T), General Motors Company (NYSE:GM), and Endo Health Solutions Inc (NASDAQ:ENDP) have announced major developments recently. Here is a close look at whether these stocks are good for investors’ portfolios.

AT&T Inc. (NYSE:T) – the largest wireless telecom operator in the U.S. – provided a business update for the second quarter of 2013. The company expects net additions of 500,000 post-paid customers during the quarter, reflecting an improvement on the first quarter during which it was outperformed by Verizon Communications Inc. (NYSE:VZ). However, a more important update has been offered on the margins front. The company expects its wireless margins to be flat sequentially, while consolidated margins may be down from the previous year.

AT&T Inc.

No change in AT&T’s full year guidance

AT&T Inc. (NYSE:T) has not changed its 2013 full year guidance with the update, but fears of margin pressure have driven the stock down over the previous 30 days. However, this may be a good opportunity to enter this dividend paying stock at discounted levels. AT&T Inc. (NYSE:T) can be expected to benefit significantly from its massive investment in internet protocol broadband networks. At a debt equity ratio of 0.84, the company is one of the least leveraged plays in the wireless space while still offering a dividend yield of 5%. Valuations, meanwhile, are not stretched as the stock still trades at a forward PE multiple of 13.2.

Increase in General Motors’ demand

General Motors Company (NYSE:GM) has been a gainer over the last quarter as encouraging economic indicators are translating to better vehicle sales. Besides, the company was recently added to Standard & Poor’s 500 index. The inclusion is creating increased demand for General Motors Company (NYSE:GM)’s shares as funds tracking the index are needed to increase their positions in the stock. This is also working on a separate plane by forcing the U.S. Treasury to sell its shareholding earlier than planned.

Reduced government meddling in the auto business is largely seen as a positive by investors who have fewer doubts about the recovering economy. General Motors Company (NYSE:GM) is one of the few pure play manufacturing bets for investors and it comes at very relaxed valuations which indicate further upside may not be a pipe dream. The stock has a forward earnings ratio of 8, debt equity ratio of 0.49, and price to book value of 1.3. In comparison, its competitor, Ford Motor Company (NYSE:F), has these ratios as 9.4, 6.1, and 3.5, respectively.

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