AT&T (stock symbol T) is an old school telecoms provider that supplies homes and businesses across the U.S. with both hard wired and cellular telecommunications.
They’re the largest telecommunications provider in U.S. with revenue approaching $125 billion, making them the twelfth largest company in the U.S. based on revenue.
What is AT&T Stock worth Today?
AT&T stock is currently trading at around $30.00. With 6 billion shares outstanding that gives them a market cap of around $182 billion which makes them the 10th largest company in the United States in terms of market cap.
With the stock price currently trading 38% lower than the pre-recession price of $50, some believe that the stock currently represents incredible value. George Soros invested heavily, but has recently been downgrading his holdings. So let’s take a closer look at the company and its outlook going forward.
AT&T Stock History Chart
AT&T Stock Price History
AT&T’s share price has recovered well from its slump during the economic meltdown of 2008, when prices dropped as low as $20.00. But they’re still well below the highs of late 2007 when they were trading at around $50.00.
AT&T has proven to be a fairly resilient company over the years, which isn’t really surprising since telecommunications has become such a mainstay of everyday life. You might not need that new TV but you need to call your mom in Idaho every week, right.
As a result they’re considered a safe bet; they’ve achieved strong growth in the past, especially in the late nineties with the introduction of wireless 3G and now 4G services along with the massive uptake of broadband, but both these markets have hit maturity now and both are highly competitive.
AT&T Stock Split History
AT&T stock has been split three times in its history. The first time was on May 26th, 1987 when the stock was split 3:1 with the stock trading at $102.50 the day before and $36.00 the day after, realizing a gain of 5.37%.
The second time was on May 26th, 1993 when the stock was split 2:1 with the stock trading at $74.75 the day before and $38.00 the day after, realizing a gain of 1.67%.
The third and final stock split took place on March 20th, 1998 when the stock was split 2:1 with the price trading at $83.75 the day before and $43.88 the day after, realizing a gain of 4.79%.
Will AT&T Stock Split Again?
With AT&T currently trading at $30, a stock split is very unlikely in the near future. Since the last split took place when the stock was trading at $83.75 it has a long way to go before anybody starts calling for it to be split again.
And since AT&T operate in a relatively mature market, there doesn’t seem to be much room for growth. AT&T is not a growth stock but it is a profitable one, which brings us to the next question.
Does AT&T Stock Pay a Dividend?
Yes is the short answer, but like most companies these days, they’re not what they used to be. Back in the late eighties AT&T dividends were around $6.80 per share. Unfortunately you won’t see anything like that level today.
Their last dividend was $0.44 per share for the quarter, which is around 5.5% yield over a year; this is an increase of 3% over the previous year and has been steadily climbing for ten years or more. Those kinds of figures are not going to set the world alight, but it’s a much better rate than you would get in the bank.
Should You Invest in AT&T Stock?
AT&T is a relatively stable stock; their service is a commodity that’s used by millions of people every single day. That’s not going to go away any time soon, so you can expect the money to keep rolling in.
That being said the company faces some issues moving forward, chief of which is wireless connectivity. AT&T isn’t exactly a leader in this field and faces stiff competition from some pretty fierce rivals. The move from wired to wireless connectivity is only likely to increase in coming years as wireless devices become more and more prevalent, and wireless has proved to be less profitable for AT&T than wired communications.
Should you invest your money here? A few years ago, just after the crash of 2007 the answer would have been a resounding yes. But now, with the future challenges they’re facing regarding wireless communications and services like Skype eroding revenue, I think there are troubled times ahead.
They’re certainly a blue chip stock and as such should be a steady bet for dividends for the foreseeable future. But if you’re looking for growth, there are much better and ultimately more profitable opportunities around right now than AT&T.
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