Is AT&T a Good Investment?

PHOTO CREDIT: AT&T

OVERVIEW

AT&T Incorporation is a company based in the United States. The company offers telecommunication services and products to companies around the world. The company offers cable TV, wireless data, voice, and text plans for mobile devices, and other internet plans for homes and businesses. The company was founded in 1983.

Why You Should?

1. AT&T is a decent reopening play in an investor’s portfolio. The company saw a drop in some parts of its business as people stayed indoors and as commercial customers lowered or canceled their plans. However, once the pandemic is over, the company will see rising demand for its products and services.
2. AT&T is starting to focus on its core telecommunication business as they have spun off their entertainment division (WarnerMedia, DirectTV, and others as well). Once AT&T spins off their businesses, the company focused to gain new wireless customers, something that was recently displayed as they blew away Wall Street’s expectations in Q2.
3. AT&T has one of the highest dividends (percentage-wise) on the stock market at the moment. With a yield of around 7.39% per stock, the company has gained many investors who are looking for a good long-term investment option with quarterly income. This has benefited the company in the past and will continue to benefit the company and its investors in the future.
4. 5G has been a cornerstone of AT&T’s recent growth. Many AT&T customers have bought the new 5G iPhone and Android devices from AT&T or other retailers. They have subsequently upgraded their plans to a more expensive 5G plan to fully utilize their devices. This 5G growth will benefit the company and its investors in the long term.

Why You Should Not?

1. AT&T faces tough competition in the telecommunications industry. Some of these companies include Verizon, T-Mobile, and others. This competition might hurt the company and its investors in the future.
2. AT&T spend billions of dollars in order to acquire entertainment companies, most notably WarnerMedia and DirectTV. This was supposed to help the company expand into the entertainment business (which made no sense regardless). These deals went terribly for AT&T, which had a stagnating stock price caused by losses and increasing debt.
3. I think that AT&T executives need to prove their decision-making again after making terrible entertainment deals. Though they have been able to start to turn the company around, I think that Verizon and T-Mobile are better investment options as both of these companies have good leadership, good balance sheets, and strong core business.

MY OPINION

I think that AT&T is a decent long-term investment due to its position as a good reopening play, 5G growth, a good dividend, and its refocusing on its core business. However, tough competition, horrible entertainment deals, and better investment options in the telecommunication industry might hurt the company and its investors.