2024-03-07 11:28:43 ET
Summary
- AT&T stock has generated a negative total return of -8% since 2017, underperforming the S&P 500 by a wide margin.
- The company's high debt level and lack of revenue/EPS growth are major concerns for investors.
- Business execution risk and high capital spending requirements in the telecommunications industry make AT&T a potential value trap.
I wrote my first Sell article on AT&T Inc. ( T ) in May 2017 here . In it, I explained the horrible balance sheet and debt issues created by its ill-advised merger with Time Warner. My view was the incredible debt load would make future share gains all but impossible. Fast-forward to early 2024 - the stock has outlined a negative total return of -8%, including dividends, measured from the start of 2017 (vs. an S&P 500 typical gain for investors of +114% over the same 7-year span). In fact, just owning the plain-vanilla Vanguard Federal Money Market Fund Inv ( VMFXX ), earning low cash yields annually, far surpassed the AT&T investment return....
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AT&T: Investor Losses Since 2017, Dim Outlook Remains