AT&T is a stock we have long followed at Young Research. Here, Barron’s outlines a bull case for the stock. You can read our latest thinking on AT&T in Intelligence Report.
AT&T investors are getting the best of both worlds today. The stock’s 4.85% dividend yield is almost twice that of the 10-year Treasury and well above the 2% paid by the S&P 500. And with AT&T’s (ticker: T) stock trading at 13 times forward earnings, its valuation looks attractive.
AT&T also offers growth potential. Under a President Trump, the telecom giant should benefit from a kinder regulatory environment and lower taxes. The company should also profit from its continuing move into media, particularly its proposed $106 billion purchase of Time Warner (TWX), now awaiting regulatory approval.
Earlier today, Baird Equity Research analyst William Power upgraded AT&T stock to Outperform. This upgrade was especially notable given that Baird’s opinion of AT&T had been stuck at Neutral since 2012.
The upgrade lifted AT&T’s share price more than 2% to a recent $41.19. The stock, up 11% since the presidential election, could generate a double-digit total return in the next 12 months.
“After many years of avoiding the telcos due to competitive concerns, we are upgrading AT&T following a confluence of events that we believe significantly improve the company’s prospects over the coming years,” says Power.
Jeremy Jones, CFA
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