AT&T Stock?

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rgs92
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AT&T Stock?

Post by rgs92 » Mon Jul 23, 2018 2:35 pm

I know it's sort of bad form to ask about a single stock, but I would wager that a number of people here have T stock.
So I'll break the unwritten rule and ask about it since it's pretty far below it's high of 40 and has a P/E in the 6-ish range and has been stalled for years now.
Thanks in advance for any comments.
(And also, some people here may have shares in an ESOP account, so they have no choice but to own it, so it would be relevant to their financial picture. They could also have an ESPP account with it.)

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Pajamas
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Re: AT&T Stock?

Post by Pajamas » Mon Jul 23, 2018 2:49 pm

A long term chart is not very encouraging. As you state, it's been stalled for decades after accounting for inflation and future prospects don't look much better. Much of the return would have been from dividends; they don't even have productive uses for their capital. I think it has about as much chance of morphing into a hot media company as Walmart does of converting into a hot internet retailer.

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rustymutt
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Re: AT&T Stock?

Post by rustymutt » Mon Jul 23, 2018 3:01 pm

I retired from AT&T, and have not owned them outside my ETF's. It's a value stock and does poorly for long periods. In exchange for what is dividends. Compared to what I've done with a balanced mix of international, home basis funds, ETF's, and government bonds, I wouldn't want try and pick stocks again. Time is the friend to all investors. Time and direction. Both solid allies for intelligent investors. :sharebeer
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abner kravitz
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Re: AT&T Stock?

Post by abner kravitz » Mon Jul 23, 2018 3:14 pm

I own a chunk that I received as compensation, but have been selling it off in pieces. T's debt load is pretty scary. I believe they will not cut the dividend except as an absolute last resort, but I wouldn't look for a lot of capital appreciation here.

I also sold some Hasbro last week, and its up 12% today, so consider my opinion accordingly.....

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Re: AT&T Stock?

Post by oldcomputerguy » Mon Jul 23, 2018 3:52 pm

rgs92 wrote:
Mon Jul 23, 2018 2:35 pm
I know it's sort of bad form to ask about a single stock, but I would wager that a number of people here have T stock.
So I'll break the unwritten rule and ask about it
What is your question?
It’s taken me a lot of years, but I’ve come around to this: If you’re dumb, surround yourself with smart people. And if you’re smart, surround yourself with smart people who disagree with you.

jminv
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Re: AT&T Stock?

Post by jminv » Mon Jul 23, 2018 3:58 pm

Not a good company to be invested in if you start picking stock. Unattractive industry and the company is concentrated in areas that are rapidly being disrupted which is leading to them bleeding customers while having their pricing compressed. History of poor returns and sure the past doesn't predict the future but I don't see things getting better anytime soon.

T's performance relative to DJIA:

Image

Comparables for ATT to best fit international and domestic companies. Note that the only one that has had a decent return has been T-mobile. Unlike ATT, T-mobile is focused on one business, wireless which investors still view rather positively (plus they started an interesting price/prepaid/feature war which their competitors first only matched through their resellers/low cost brands). Investors don't view fixed lines, internet connections, or Direct TV positively anymore, which is the other parts that ATT offers.

Image

Longer term performance versus S&P 500. History of underperformance (this includes the dividends re-invested).

Image

blackburnian
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Re: AT&T Stock?

Post by blackburnian » Mon Jul 23, 2018 7:00 pm

I had two chunks of AT&T, one given to me by my mother decades ago, and one inherited after her death. She liked it for the dividends. I sold the inherited chunk as soon as I could, at 39/sh (a loss). I donated the gifted chunk (which had a very low cost basis) to a charity. I am glad to be rid of it--but I do miss the dividends. I have no idea what it will do in the future, but since you are asking what others did, that's my story.

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Taylor Larimore
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Re: AT&T Stock?

Post by Taylor Larimore » Mon Jul 23, 2018 7:13 pm

rgs:

Your post gives us a lesson why it is dangerous to buy individual stocks. I remember when AT&T stock was considered the bluest of blue-ribbon stocks.

Congratulations for topping 2,000 Boglehead posts!

Best wishes.
Taylor
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rgs92
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Re: AT&T Stock?

Post by rgs92 » Mon Jul 23, 2018 8:33 pm

Thank you Taylor. And congratulations on the great new book and the NY Times good review of it. I hope you sell many copies.

(The original AT&T was such a huge presence at one time it's hard to imagine, almost on the scale of the Federal Gov't. I have read that it represented 6% of the GDP. Just some history here for anyone interested.)

And thanks jminv for the comprehensive technical and fundamental analysis. That's what I was interested in.
Last edited by rgs92 on Mon Jul 23, 2018 10:09 pm, edited 1 time in total.

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Re: AT&T Stock?

Post by abuss368 » Mon Jul 23, 2018 9:26 pm

Years ago we sold our individual stocks and learn the Boglehead way! AT&T was one of those stocks. It was expected to take off at the time because the company had exclusive iPhone rights and was the first provider to sell the phone. It never did.
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Valuethinker
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Re: AT&T Stock?

Post by Valuethinker » Tue Jul 24, 2018 4:03 am

rgs92 wrote:
Mon Jul 23, 2018 8:33 pm
Thank you Taylor. And congratulations on the great new book and the NY Times good review of it. I hope you sell many copies.

(The original AT&T was such a huge presence at one time it's hard to imagine, almost on the scale of the Federal Gov't. I have read that it represented 6% of the GDP. Just some history here for anyone interested.)

And thanks jminv for the comprehensive technical and fundamental analysis. That's what I was interested in.
I struggle to believe it was ever 6% of GDP, or the numerator of that percentage was suspect. Yes, it was a huge company (Ma Bell plus all the affiliated companies).

https://spectrum.ieee.org/tech-history/ ... end-of-att

1975 revenues are 1.6% of US GDP.

https://www.economist.com/business/2018 ... gest-firms implies it was never 1% of GDP (world). Associated table does not appear to be on the web version.

https://www.fool.com/investing/general/ ... anies.aspx

https://www.marketwatch.com/story/how-t ... 2017-11-16

1967 it was actually smaller in market cap than IBM.
Last edited by Valuethinker on Tue Jul 24, 2018 4:19 am, edited 2 times in total.

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Re: AT&T Stock?

Post by Valuethinker » Tue Jul 24, 2018 4:04 am

rgs92 wrote:
Mon Jul 23, 2018 2:35 pm
I know it's sort of bad form to ask about a single stock, but I would wager that a number of people here have T stock.
So I'll break the unwritten rule and ask about it since it's pretty far below it's high of 40 and has a P/E in the 6-ish range and has been stalled for years now.
Thanks in advance for any comments.
(And also, some people here may have shares in an ESOP account, so they have no choice but to own it, so it would be relevant to their financial picture. They could also have an ESPP account with it.)
Adopts Clint Eastwood voice -- Inspector Harry Callaghan, SFPD: "You feel lucky today, punk?"

It's either cheap, or doomed, or both. Don't assume that we can divine more about its future prospects than the stock market as a whole can.

You look at it, and you look at Tesla, and it's easy to question the market's rationality ;-).

danaht
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Re: AT&T Stock?

Post by danaht » Tue Jul 24, 2018 7:32 am

I have some AT&T stock. Still prefer to buy indexes - but I will buy individual company stock as well. AT&T is a dividend aristocrat - but that alone does not mean they will be able to keep on paying and raising the dividend. AT&T has made a few mistakes recently - and so the stock price has suffered.

gliderpilot567
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Re: AT&T Stock?

Post by gliderpilot567 » Tue Jul 24, 2018 8:20 am

I found an old stock certificate indicating that I own a few shares of AT&T stock, which my father purchased for me when I was born. After extensive research and lots of digging, I learned that there have been some merges, splits, and divestitures over the years and it is almost impossible to price the original stock correctly. Also, I learned that I have about $38 in unclaimed property held by my birth state, probably a few leftover dividend payouts.

The printed stock certificate looks really nice and I plan to frame it and hang it on the wall somewhere.

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nedsaid
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Re: AT&T Stock?

Post by nedsaid » Tue Jul 24, 2018 11:12 am

I do own AT&T stock in a DRIP plan.

Owned it in an IRA for years, got the Lucent spin-off, added to Lucent and Lucent was a great investment until the 2000 crash. The AT&T was switched for AT&T wireless which I sold at some point.

The AT&T stock in the DRIP plan used to be SBC Communications which was one of the Bell companies which then merged with former Bell Companies, AT&T Wireless, and what was left of the old AY&T to become a remake of the old AT&T which is missing Atlantic Bell (part of Verizon) and Pacific Northwest Bell which is now another company, name escapes me at the moment.

In one form or another, I have owned AT&T for years. I suppose it would be a part of my Four Horsemen of Underperformance. My "anti-index" had some former luminaries as GE, Pfizer, AIG, and Microsoft. I replaced Microsoft with Comtech Communications but even Comtech has been doing better lately. Maybe AT&T should replace Comtech in my "anti-index." Can't just add it as there are no five horsemen in literature. Four horsemen is catchy as well as apocalyptic.
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rgs92
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Re: AT&T Stock?

Post by rgs92 » Tue Jul 24, 2018 11:23 am

Thanks nedsaid. Yep, it is very shrunken company from the empire days.

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Re: AT&T Stock?

Post by nedsaid » Tue Jul 24, 2018 12:00 pm

rgs92 wrote:
Tue Jul 24, 2018 11:23 am
Thanks nedsaid. Yep, it is very shrunken company from the empire days.
Well, it is the old AT&T minus Atlantic Bell minus Pacific NW Bell minus Lucent plus Time Warner. How much has it shrunk?
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CyclingDuo
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Re: AT&T Stock?

Post by CyclingDuo » Tue Jul 24, 2018 1:03 pm

rgs92 wrote:
Mon Jul 23, 2018 2:35 pm
I know it's sort of bad form to ask about a single stock, but I would wager that a number of people here have T stock.
So I'll break the unwritten rule and ask about it since it's pretty far below it's high of 40 and has a P/E in the 6-ish range and has been stalled for years now.
Thanks in advance for any comments.
(And also, some people here may have shares in an ESOP account, so they have no choice but to own it, so it would be relevant to their financial picture. They could also have an ESPP account with it.)
Telecom's share prices are going to trade much like a utility. Share price doesn't do much over time (outside of the usual ups and downs as sectors go in and out of favor with the business cycle), but the dividends are the return. T's share price is a bit in the dog house again until the appeal process of the DOJ for their recent merger is completed (that will take months as I believe even in an expedited situation documents are not even due until October in the appeal). In the meantime, you're looking at a dividend yield of 6.X%. Probably best for an investor who needs income "now" as part of a dividend income producing portfolio of REITS, preferred's, Utilities, Telecom's, etc... . Or rather part of a "buy an income" or "buy a salary replacement" portfolio to fill a gap - be it between the chosen or forced retirement date and before SS starts to flow, or to fill an income gap that SS and pension are not filling.

The cap-ex spend of telecom's and the debt for the cap-ex keeps a lid on the share prices of a stock like AT&T or Verizon. Both have been positioning themselves well for the upcoming 5G. T certainly looks undervalued compared to Verizon at the moment, but time will tell for those who see a good risk/reward scenario. They report earnings tonight and perhaps will provide more commentary to how the merger is going.

We own some shares through an inheritance my wife received and I'm not allowed to exchange it for something else - her rules - although I do use the dividends from both T and VZ to buy more Total Stock Market and Total International which she agreed to allow me to do in our discussions over the past two years.

CyclingDuo
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LukeHeinz57
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Re: AT&T Stock?

Post by LukeHeinz57 » Thu Oct 25, 2018 1:12 pm

Curious what you ended up doing if anything OP. Given the most recent earnings report and subsequent 10%+ selloff it's certainly looking like a value play. If I were inclined to speculate this is a stock I would attempt to do so with right now. The market seems to be pricing in credit downgrades and a complete write off of the DirecTV acquisition. It seems like anything remotely positive or even neutral should return it to the mid 30's. In the meantime you're collecting an almost 7% dividend that is covered with an under 60% payout ratio FCF under 70% via earnings.
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cadillex
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Re: AT&T Stock?

Post by cadillex » Thu Oct 25, 2018 8:26 pm

had T for years, probably was slightly profitable due to dividend. i just sold it in favor of indexing. it could be poised for rebound, or continue to drop. its a stock like any other, could be like google, could be like yahoo. amazon or sears...
the great dividend wasnt enough to overcome the continuous flatline to decline. sold GE also, another one i got tired of waiting for.
i'm done picking stocks and am transferring everything to index funds. not overnight, but methodically.
now helping parents unwind 40 yrs of stock accumulation. unfortunately some of those we are stuck with until they get the step up in basis.
have you seen ibm lately. ugh.

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Re: AT&T Stock?

Post by Grt2bOutdoors » Thu Oct 25, 2018 8:39 pm

nedsaid wrote:
Tue Jul 24, 2018 12:00 pm
rgs92 wrote:
Tue Jul 24, 2018 11:23 am
Thanks nedsaid. Yep, it is very shrunken company from the empire days.
Well, it is the old AT&T minus Atlantic Bell minus Pacific NW Bell minus Lucent plus Time Warner. How much has it shrunk?
A.t&t of today is Southwestern Bell + Ameritech + Pacific Telesis - Airtouch Communications (now part of Vodafone for international interests/domestic interests owned by Verizon) + BellSouth + Cingular Wireless (JV between SW Bell and Bell South) + former shell of itself A.T.&T. - Lucent Technology.

US West is now owned by Century Telecommunications.

Verizon is combination of Bell Atlantic and NYNEX. NYNEX bought GTE before it merged with Bell Atlantic.
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