AT&T, Inc. (T)

AT&T presents an above-average opportunity for at least the second half of 2009 because of its continued growth opportunities with the reduced price iPhone/iPhone 3GS, attractive valuation, and remarkable yield. These characteristics outweigh my fears related to the uncertainty surrounding the DoJ probes and risks that AT&T will lose its exclusive contract with Apple for future iPhones to Verizon or another competitor. Fundamentally this is a sound company that just happens to be surrounded by a lot of market noise.

The iPhone growth story has been written and reported ad nauseam so I will keep this brief: the iPhone trumps the competition. RIMM is a great company with a strong business (and growing consumer) presence but it lacks the breadth of apps or ease of use to really compete with the iPhone. Palm’s Pre is the talk of the town but it will have severe difficulty breaching Apple’s walled garden or being able to reach critical mass with consumers. There is little debate that the iPhone has been anointed as the de-facto popular smart phone right now so investors may as well enjoy the ride similar to MOT during the Razor craze (take note of MOT’s chart before, during, and after the Razor era for a warning tale).

In terms of valuation, with a trailing PE of less than 12 and forward PE of less than 11, I believe that AT&T’s growth is being underestimated. Despite sales being relatively flat TTM and the economy still uncertain, I cannot fathom T’s EPS growth falling by half as some analysts predict. While the liquidity ratios are lower than I usually like for stocks I recommend (.5 quick and .6 current), they are in-line with the industry averages: with a market cap well in excess of $100B, this should not even be an issue.

The return on assets and on investment are both greater than the industry averages (4.8 and 7.8 versus 4.1 and 7.3, respectively) indicating management effectiveness yet the company is trading at a twenty-five basis point discount of price-to-book. The only additional thing that I would like to see management do is repurchase some shares but with the yield, I cannot complain.

The dividend yield in excess of 6.7% is robust and appears safe, although the payout ratio over 75 is entering the danger zone. Given the fact that cash from continuing operations alone is virtually high enough to cover all other cash obligations, you have a certified cash cow; however, I do not envision T raising its dividend much (if at all) in the future. The yield is already significantly higher than historic averages and I anticipate capital expenditures to ramp up as T continued to develop/expand its network to keep pace with the iPhone traffic.

In closing, I do not believe that the DoJ inquires will have a material impact on AT&T, although I do see the elevated uncertainty slowing its stock price appreciation in the coming months (but, hey, that’s what the meaty yield is for!). These type of exclusive agreements are nothing new and have existed for entertainment software (read: videogames) since the birth of the industry. With the economy in such poor shape and talk of a second stimulus, I hardly think investing the telecom industry and luxury phone contracts will become a priority. AT&T should be able to keep its exclusivity with Apple because AT&T needs Apple and is far more willing to subsidize its phones than other carriers would be. Now that AT&T has eaten from Apple’s growth tree, I do not see them giving that growth up very easily. At the very worst, AT&T has lots of new subscribers locked-in with two-year contracts that should lessen the blow of potentially losing the exclusive contact.

Pick has been open nearly a year and a half, guess it's time to add a pitch.

I think AT&T is one of the best values among large cap stocks. Based on the 6 Jun 08 close, the company is trading at 11 times 2009 earnings, has an estimated long term growth rate of just under 10% and pays a dividend yielding over 4%.

Wireless growth has been strong enough to more than offset shrinking land line phone service and the triple play TV-internet-phone service has a lot of growth potential - and a lot of competition.

A safe dividend yield that's higher than treasuries and is likely to get hiked year after year makes this stock a compelling option for income investors.

This crappy company laid one of my friends off. He was making 80 grand a year. He was replaced by a guy in India probably making half of that. American Thieves and Thugs are at it again doing what they do best. These multinational corporations don't care. Cheapest labor, cheapest everything in exchange for slave labor. T you've done it again. Get ready for Q1 numbers you swine. Unioin needs to get the hell out of Detroit and move to China.

The unemployed will give up their house and car before they give up their phone. Isn't that a comforting basis for investing?
They have a lot of debt, but they seem to have a very safe stream of cash flow to service it. They pay a very nice dividend that is currently above 7%. For those who dare to be dull, this is not a bad place to invest right now.

At&T, wihtout Apple would be stuck like Chuck on NBC not knowing what the next day is going to hold. Seriously, their volume has surged upon Apple's IPhone and that is not a bad thing, but the surge in stock price will catch up to them as the market saturates with product. Early summer I would expect a decline.

AT&T (Cingular) This is my cell phone company. I have not had a problem with this company since it took Cingular along for the ride. They have there ups and down like any other company. But they are staying a float on their innertube while riding the rapids called life. I'm going jump on and ride with them. It's going to be a little bumpy but I have my life jacket on.....

May not pay off in CAPS, but in general I am in favor of investing in large caps with good earnings prospects, not to mention that this company pays a pretty nice dividend. Over the long haul, cable companies may crimp phone company's pricing power which may result in lower returns. However, the infrastructure is not in place yet, making the phone company the leading provider of the holy trinity of cable, phone, and internet.

Chosen to be a part of the High Yield Portfolio strategy. Originally created by Fool UK's Stephen Bland (TMFPyad) in November 2000, the High-Yield Portfolio (HYP) strategy invests in a diversified group of 15 blue chip dividend-paying stocks with strong dividend cover, relatively low debt, and a history of increasing dividend payouts. The holding period is theoretically forever -- unless a stock is bought out or cuts its dividend.

Sound crazy? Well, the point of the portfolio is not necessarily for capital gains (although that's certainly a bonus), but to produce increasing amounts of annual dividend income. Daily price fluctuations matter not -- it's the income that matters -- so it removes emotional trading from the picture entirely. Doubters should note that the original UK HYP from November 2000 returned 68% through December 2007 (while the FTSE 100 lost 8%). What's more, the portfolio income payout increased 29% over that seven year period, from 3,451 pounds to 4,462 pounds per year.

Testing out a portfolio of stocks rated outperform that are characterized by having one letter ticker symbols.

maxed out, VZ will wake up and start acquiring. lots of competition for business

As ridiculous as it sounds (or maybe it's just obvious), the iphone will help at&t enormously. With the structure of At&t, they can lure in new customers to wireless, and then persuade them to bundle with many other services that at&t provides (landline, dsl, etc.). Not only that, but the bills for most of the millions of customers who decide to pick up the iphone are going to be substantially higher because of the data plans necessary for these phones. It seems obvious that if At&t plays its cards right, it will be hard to stop the cash flow.

The bullish call is ringing and its time to answer it. Owing to its strong operating performance in the third quarter, AT&T has marked this quarter as the sixth consecutive quarter of double-digit earnings growth. AT&T provides telecommunication services and products across 240 countries including the U.S. Moreover, it is the market leader in the U.S. wireless industry through its joint venture with BellSouth Cingular Wireless. AT&T holds a 60% stake in this joint venture.

Increased contributions from Cingular’s wireless and wireline operations have been the major drivers for AT&T. AT&T, through Cingular Wireless had 58.7 million wireless subscribers at the end of the third quarter of 2006 thus building its share to 30% of the U.S. wireless subscriber base. The company’s subscriber base is improving due to higher gross additions and lower churn rates in its wireless segment. Despite the fact that the company’s wireless metrics have been strong, its wireline metrics have been mixed to negative.

Moreover, Cingular’s slightly improved average revenue per user (ARPU) and declined churn rate augurs well for the company’s revenue and profitability. Additionally, pending merger with Bellsouth will provide additional benefits from synergies and cost savings when consolidation of remaining 40% ownership of Cingular wireless with AT&T will take place.

In the light of the company’s strong performances in the last 6 quarters and solid long-term fundamentals, it is believed that the company is capable of achieving higher earnings growth rate, higher EBITDA margins, rationalization of costs due to merger, and better ARPU for the coming years. With only modest leverage and strong cash flow generating abilities, it is expected that AT&T will continue to add substantial value to its shareholders.

Good Dividend

WIFI ,,,, Whoever gets the cities gets the pie ...

They will lay down the free "slow access" and sell upgrades.

Will cost some big dollars to make the first steps.

Pros:

- Took over Cingular's network, making it the biggest cellular network in the U.S.
- Sole distributor for Apple's new iPhone
- Growth in Mkt. Share due to exclusivity of iPhone
- Other carriers may lose current customers who switch to AT&T solely for iPhone
- Their financials are finally turning around after the recent acquisition of Cingular
- Starting to build a solid foundation that is needed to stay ahead of Verizon and maintain iPhone
- Apple is known for user friendly devices that run with very few to no glitches. This will only fuel more customers using AT&T's service

Cons:

- Lots of "hype" surrounding the iPhone release
- Could be boom or bust for AT&T given its poor performance as of late
- Customer service may become an issue due to recent demand for cellular devices, including iPhone

Toyota makes great cars... lower costs.... higher quality... good brand name and reputation and ratings... watch new technology come quickly from them... increased safety, gas mileage... good looks... reasonable retail good resale value. Solid like IBM, J&J, PG, etc.

An estimated 40% of the customers planning to buy the iphone are not currently at&t customers and are going to switch carriers

AT&T can provide phone, cellular, high speed internet, and satellite TV to consumers. Also, solid corporate communication business as well. Name brand recognition. Low customer turnover. Able to bundle services and provide discount to consumers, Provide 12% earnings growth over the next couple of years through revenue growth and focus on cost savings. 4% dividend yield does not hurt either and provides a cushion to the down side.

AT&T has legacy customers that relay on the network for daily business. This type of customer is both loyal and well taken care of. The one thing I notice about the "NEW" AT&T is the focus on customer service. They seem dead set on making every customer happy from the guy with lifeline services "POTS Only" to the multi billion doller global business.

Exclusive rights to iPhone (for 5 years?) will keep existing customers and bring in new ones 9to the detriment of Alltel, Sprint, VZ, etc). Sure, they'll be cheaper alternatives, but I think this helps T to outperform for at least the next year. I see $50 by January 2008.