AT&T is a huge company with a diverse range of holdings across telecommunications, media, and tech so most people would see it as a solid investment. But with the issues from the Warner merger a few years ago still having repercussions, is it still a safe bet?
Where is AT&T Now?
AT&T has recently paid off $40 billion of its debt, reducing its interest repayments by around $1.5 billion, giving the potential to increase profit margins and improve cash flow. Combined with a low price-to-earnings ratio, this has led some investors to think that AT&T may now be a good investment.
On the other hand, AT&T has been reducing its historically high dividends. There has also been a recent history of unsuccessful acquisitions and partnerships. For example, the company expected to create a tech and media giant with the acquisition of Time Warner. Unfortunately, the deal failed, with the Warner business being spun off again after only a few years. The reduced dividends and shaky history have together caused stock prices to fall.
What the Future Holds for AT&T
The company predicts that its earnings before interest, taxes, depreciation, and amortization (EBITDA) will grow slightly to between $41 billion and $ 42 billion. These earnings are expected to cause earnings per share (EPS) to grow from $2.42 to $2.46. AT&T's telecommunication business revenue is the primary driver of this growth, and experts anticipate that this steady growth will continue throughout 2023.
AT&T (NYSE:T) seems worth buying if you are looking for low-risk investments with a predictable but small return. However, if you are seeking stocks that will quickly make you rich, there are better options on the market.