Is this your opinion or is it factual? You need not explain the implications of the date you posted; very clear to me.
Despite of intense financial engineering, the revenue growth simply isn't there. Did someone say WANG?
"Call me Juan" will be replaced by Kramer.
For the last several decades, Sprint hasn't accomplished much in the competitive landscape. No reason to believe that history won't repeat itself, but wait I almost forgot about this youngster from Japan who claims to crush T as well as VZ. To that I say, keep dreaming man.
Sentiment: Strong Buy
Analysts are upbeat when covering VZ and lukewarm about AT&T. How can this be while the numbers clearly shows the AT&T stock to be far superior to VZ?
The answer is rather simple and happens to have a political dimension. How so? With the pending Vodaphone buyout/divesture, about $100B will exchange hands and the analysts are no dummies, they simply want a piece of the action. And now, you know the rest of the story.
There has to be a balance between the two. Companies typically cut down on CAPX to make the numbers compute. The AT&T management seems to be confused as to what their priorities are.
AT&T will become the first choice in data transmission. How so? The fact that IBM has chosen AT&T for data transmission clearly illustrates the undisputable strength the company has.
The high yield corporate bonds yield stands at 6.00%, i.e. HYG. Based on that number, the AT&T stock offers a tremendous value at yields of 5.00% with credit ratings far above the corporate high yields level.
Working the numbers based on yield alone, never mind the fact that the company has increased the dividends for the last 25 to 30 years and continue to do so, the FV of the stock price is in the $40.00 to 45.00 range.
Yes and no. First the yes part. In an environment where making the numbers or missing the them by just "one" penny is surely and important factor to consider. The newly announced administrative charges will add only "one" penny to the earnings per year.
And then the no part. Increasing the earnings by just one penny can be viewed as rather insignificant.
In their 8K filing, AT&T states that they have closed the global bond offering maturing in 2043 for the equivalent amount of $1.56B carrying interest rate of 4.25%. Overall, I would rate this move as positive although the rate seems a bit on the high side and also would have expected the face value to be larger than what is stated in the May 15th filing but still this is a positive move to take advantage of the current low rates. Going by the Friday's stock price action, the market doesn't seem to positively have reacted to this offering given that there are many moving parts to affect the stock price the most important one being competition such as DISH, Sprint, you name it. I am not terribly thrilled about VZ and the hoopla generated in the press and do not agree with the optimism expressed by Barclay.
Sooner or later, people who are on the buying side will run out of stocks to buy never mind the healthy dividend. All the utilities are up. It is given that this stock will go up. Will it hit the $45.00 mark? Perhaps but the $42.00 mark should be reached without any difficulties.
The word "command" should read "commend." My apology for the error since I do not want to be accused of being from NJ where English is the optional language. Also, the word "Rational" should read "Rationale."
From HOLD to STRONG HOLD.
Right and left, investors are rushing to buy dividend yielding stocks to the point that, today, 3% yield would seem favorable in a continuing deflationary environment we are in. As a result, the dividend yielding stocks are in high demand. We are gradually reaching a point where even the utilities such as DUK, SO, etc. have posted sizable gains in stock price driving the yield closer to the 4% mark. Unlike these utilities where there is absolutely no growth, AT&T is expected to grow earnings in high single digits with track record of increasing the dividend as they have done during the last 25 years.
Okay then, why do investors prefer to stay away from investing in this stock? Simply stated, people keep thinking this is still the AT&T of Bob Allen, Greg A. Smith, Jerry Mulyk and of course who can ever forget the dinasore called BELL LABS, IMO. No more of these incompetent managers and gone are the golden days of BELL LABS where the sky was the limit for spending without observable accomplishments. In fact, one of the major achievement of today's AT&T was to ditch BELLLABS. I command those individuals for having made such a brilliant move.
Caution- The above is just one man's own opinion and interpretation. Always do your own DD. The author holds a position in the AT&T stock.
Good point, a liability that is not measurable especially when dealing with unions. With today's internet trading of stocks, the employee would be wise to get on board and take charge. Granted the PBGC does provide some safety but trying to collect for insured funds could turn out to be a big hassle.
Pension Funds are misused and abused by management, in part because of the changes in laws of which enabled companies to use what was then "surplus" which took place several decades ago. In fact, one of the arguments raised in the AT&T breakup was the powerful pension fund then of which was thought out to be as powerful as the U.S. Treasury. Today, the pendulum has swung in the opposite direction creating monumental problems in figuring out exactly what the liabilities are, never mind the fact that they have a terrible time in earning a reasonable returns on invested funds in a skyrocketing stock market. Take a look at the IL Pension Fund, with shortfall approaching the $100.00B mark.
I believe moving to Cash Balance type of a plan is a move in the right direction coupled with the fact that less and less companies continue to have the traditional plans anyway. It is fair, easily understood, simplifies the accounting immensely.
The calculus of borrowing isn't that easy. Borrow tons of money do buybacks and then what? You are locked in and owe the money indefinitely while there is considerable more flexibility with the dividends. Nothing prevents a company from reducing the dividend while if the company has outstanding bonds, forget it. Not much can be done there. If AT&T's approach made economic dollars and sense, all companies would rush to do the same.
To be sure, the case of AAPL is entirely different with the proceeds to do buybacks/dividends. How? AAPL has the funds in international markets and by issuing bonds, they have achieved "tax avoidance," entirely different matter, no similarities whatsoever.