AT&T Ranks Second among Its Peers in Market Capitalization



AT&T’s multiples

In earlier parts of this series, we looked briefly at AT&T’s (T) performance in 4Q15. In this part, let’s look at select value-centric metrics of AT&T and some companies in the global telecommunication space.

By market capitalization, AT&T ranks second among global telecom companies as of January 26, 2016. China Mobile (CHL) remains the leader in this metric as of the same date. Verizon (VZ) ranks third.

Now let’s observe the price multiples of AT&T and some of its peers. On January 26, 2016, AT&T had a forward price-to-cash flow multiple of ~5x. Meanwhile, the same metric for Verizon was ~6.2x.

Among global telecom players, Deutsche Telekom (DTEGY) and China Mobile had comparable ratios of ~4.9x and ~5.9x, respectively, as of January 26, 2016. For America Movil (AMX), this multiple was at ~4x on the same date.

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AT&T’s dividend yield

Now let’s move to the dividend yield metrics of AT&T and its select peers. As of January 26, 2016, AT&T had a forward annual dividend yield of ~5.4%. The same metric for Verizon was ~4.7%.

Among AT&T’s global peers, forward dividend yields of Deutsche Telekom and China Mobile were ~3.4% and ~3.5%, respectively, as of the same date.

Instead of taking direct exposure to the stocks of players in the US telecom industry, you may consider taking diversified exposure to the space by investing in the SPDR S&P 500 ETF (SPY).

SPY held a total of ~2.4% in US telecom companies at the end of December 2015.


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