AT&T: A Spring-Loaded Stock On iPhone 5 Release
AT&T (T) looks appealing as a long-term defensive position in the telecom industry. This stock offers an adequate dividend alongside stable metrics. AT&T also has potential for an uptick with the release of the new iPhone 5, while it steadily improves its global portfolio and enterprise services. AT&T has been successful in continuously increasing its massive customer-base while improving profitability per user and decreasing churn rates. Current shareholders should hold long-term while interested investors should buy as products launch for the holiday season and AT&T continually expands its LTE network.
Verizon (VZ) is the most direct competitor to AT&T. CenturyLink (CTL) is also comparable as a U.S. telecom focused on expanding its wireline network and global enterprise portfolio. Sprint (S) is comparable because it is the third major wireless carrier and also depends heavily on iPhone sales. Apple’s (AAPL) metrics are also relative as its new iPhone 5 launch will be a major catalyst in third and fourth quarter revenues for major wireless carriers. Both AT&T and CenturyLink’s price is around 51 times earnings; Verizon’s price is around 45 times earnings. AT&T’s price-to-book ratio is around 2.14, Verizon’s is around 3.5, CenturyLink is around 1.32 and Sprint is at 1.69.
AT&T’s price-to-sales ratio is around 1.73, higher than Verizon at 1.15, Sprint’s 0.45 and CenturyLink’s 1.45. Verizon’s EPS is around $1.00, higher than AT&T’s $0.75 and CenturyLink’s $0.84, Sprint’s is -$1.28. Apple’s sales growth for the past 5 years was around 41.16% and the past quarter and YOY was around 22.58%. AT&T’s sales growth for the past 5 years has been around 14.9%, Verizon’s was 4.69%, and Sprint was at a 3.86% deficit. To continue reading, click here.