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AT&T Inc. (T), Verizon Communications Inc. (VZ): Rethink Possible, Rethink Stable Investing

A leading provider of telecommunications services in the United States and worldwide, AT&T Inc. (NYSE:T), has risen only 2.16% year to date, a far cry from the 11.53% return provided by the Dow Jones Industrial Average.

AT&T Inc. (NYSE:T) is a leading provider of telecommunications services in the United States and worldwide. Based on market capitalization, the company is valued at $186.60 billion. The company possesses a price-to-book ratio of 2.17. Fundamentally, the company’s business model appears strong, with a trailing 12-month profit margin of 5.81%.

AT&T Inc.

With the company still trading at only half if its all-time highs made in in 1999, should investors jump on this company while they still can, or should they stay away from this telecom giant?

Strengths

  • Historic revenue growth: In 2003, AT&T Inc. (NYSE:T) reported revenue of $40.84 billion; in 2012, the company announced revenue of $127.43 billion, representing year over year annual growth of 13.48%, a strong trend anticipated to sustain into the future, with projections placing 2019 revenue at $162 billion (this growth has been a result of the company expanding into several new industries).
  • Steady asset growth: Assets of the company have grown from $133.92 billion in 2003 to $260.27 billion in 2012, a strong financial trend.
  • Institutional vote of confidence: 54% of shares outstanding are held by institutional investors, representing over $90 billion in investment, displaying the confidence some of the largest investors in the world have in the company and its future
  • Relatively low volatility: At the moment, the company possesses a beta ratio of 0.56, representing a company trading with considerably less volatility than the overall market.
  • Established and diversified nature: As of the end of 2011, AT&T Inc. (NYSE:T) serviced 103.2 million wireless connections, employed 241,130, and possessed a dominant industry position in the United States telecommunications industry; with this established and diversified nature comes a greater level of security and predictability for investors.
  • Cash flow: In 2011, AT&T Inc. (NYSE:T) generated $3.75 per share in cash flow, representing the caliber of financial strength the company possesses, allowing the company to pay out its 5.24% yielding dividend.

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