Trade AT&T Stock
Headquartered in Dallas, Texas, AT&T Inc. is an American multinational conglomerate holding company that was founded in 1983 and a global leader in the provision of telecommunications and digital entertainment services.
Going further back in time, AT&T has a rich history that is linked to the 19th-century invention of the telephone by Alexander Graham Bell. A series of anti-monopoly lawsuits led to divisions and divestitures, giving birth to the modern-day AT&T Inc., which no doubt still remains a giant conglomerate.
AT&T held its initial public offering (IPO) just a year after its founding on July 19, 1984. AT&T stock is listed in the New York Stock Exchange (NYSE) where it trades under the ticker symbol ‘T’. The stock falls under the Wireless Telecommunications Industry, under the Telecommunications Services sector.
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AT&T operates through four business segments:
- Business Solutions – This segment offers business customers comprehensive communication solutions by providing strategic services, such as IP-based networking solutions, app-based routing, broadband, as well as data and voice solutions;
- Entertainment Group – This segment provides on-demand video, Internet, voice communication, as well as interactive and targeted advertising services to US-based customers;
- Consumer Mobility – This segment is responsible for providing triple-play (voice, video and high-speed Internet) wireless service to consumers, as well as to wholesale and resale wireless subscribers located in the United States or its territories.
- International – This segment runs entertainment services in Latin America and wireless services in Mexico.
AT&T started reporting its financials in terms of the above segments in Q3 2015, and since then, the Consumer Mobility unit has been the consistent best performer, bringing in over 40% of the company’s revenues.
AT&T has always been an active player in the mergers and acquisitions market. Some of its recent major buys include Lusacell and Nextel Mexico, which were bought in 2015 and which merged to form AT&T Mexico.
In 2015, AT&T also acquired DIRECTV for $48.5 billion in a deal that effectively made AT&T the largest pay-TV provider in the United States and the world.
Still, the standout deal, thus far, has been the 2016 $85.4 billion merger with Time Warner that turned AT&T into a media and entertainment powerhouse with control over properties such as CNN, Warner Bros, HBO, TNT and TBS.
AT&T Stock History
AT&T went public with a split-adjusted IPO price of $1.25, and since then, the company has had 3 stock splits as follows: a 3-for-1 split on 22nd May 1987; a 2-for-1 split on 25th May 1993; and a 2-for-1 split on 19th March 1998.
AT&T stock has been a solid performer over the years. Its best years were undoubtedly in the 90s when the stock rose to hit its all-time high of circa $60 in July 1999. It maintained its resilience for a few months and then faced its first major headwind in November 2000.
This occurred when the entire telecom industry was under siege as there was pressure to undertake major capital-intensive infrastructural projects to remain relevant and prepare for the future of the Internet.
The stock was then pressured lower, finally reaching a support low of circa $20 in May 2003. Since then, AT&T has been a resilient performer, mirroring the strength of the US economy and consistently outperforming the benchmark S&P 500 index. As of November 2018, AT&T stock has been trading around $30, and the company has a market capitalisation of about $217 billion.
AT&T has always been a generous dividend payer, paying out incremental quarterly dividends since it went public in 1984. The first quarterly AT&T dividend was $1.40 a share, increasing to $1.74 a share in 1987 when it undertook its first forward split.
It then started paying out $0.58 a share, which also increased gradually to $0.73 a share in 1993 when the second share split was done. After that, the company paid $0.38 a share, which increased to $0.45 a share when the third split was performed in 1998. The company then started to pay out $0.23 a share, and this has jumped to $0.50 a share as of Q4 2018.
A consistent dividend payer implies a mature and financially healthy company, and this will always be attractive for many investors. Some investors will love the consistent cash flow, while others will savour the opportunity to reinvest their dividends for even more compounded profits.
How to Trade AT&T Stock
AT&T is one of the most followed and traded stocks on Wall Street. Here is what to always keep in mind when trading AT&T stock:
- Tariffs and Trade Agreements
As of November 2018, AT&T is the largest provider of pay-TV in the world, and it has customers in the US and more than a dozen Latin American countries. It also offers cloud-based solutions to businesses worldwide. As a multinational conglomerate, changes in tariffs and trade agreements can impact AT&T stock significantly.
- Legislative or Taxation Policy
AT&T faced the brunt of crude legislative policy in the past, notably when it was split up after being deemed a monopoly. In June 2018, it had to conclude a long-running legal saga to formally complete the Time Warner merger. AT&T also operates in multiple jurisdictions and plans aggressive international expansion. This exposes it to complex legislative and taxation regimes that may hinder wider profit margins.
- Competitor Performance
As of November 2018, AT&T is a leader in the pay-TV sector, but it comes second in wireless communication, just behind Verizon. In this space, it also faces fierce competitors in T-Mobile and Sprint, two companies that are planning a merger. This could muddy the waters even further. Its Time Warner merger also means that it attracts heavyweight competitors in the mainstream and internet media scene. It is therefore important to track the performance of its competitors to gain an objective insight on where AT&T truly stands.
- Periodic Earnings Reports
The AT&T fiscal year runs from January to December, and the company releases quarterly earnings reports to keep its shareholders up to date on its financial health. When studying AT&T’s earnings, it is essential to look at metrics, such as subscriber growth as well as debt and dividend payouts. AT&T has always maintained incremental dividend payouts, and a lower payout would likely be a negative signal. With regards to debt, AT&T has taken huge leverage with its recent major acquisitions, and it is important to assess whether the company is sufficiently capable of meeting its debt obligation.
Since AT&T operates in a dynamic and fast-paced industry, it is important to investigate the impact that all these factors can cause in the short term, rather than in the long term, where AT&T stock prices would have discounted them accordingly.
Disclaimer: This is a general analysis and not to be viewed or construed as actual trading advice or a recommendation of any kind and just an example of how a particular instrument could, potentially, be traded.
AT&T Stock Trading Information
- MT4 Symbol: #AT&T
- Trading Time: Monday – Friday 14:30 – 20:59 London Time GMT
- Country: USA
- Currency: USD
- Exchange: NYSE
Why Trade AT&T stock with Friedberg Direct
- Regulation – Friedberg Direct, a division of the Friedberg Mercantile Group Ltd, is a member of the Investment Industry Regulatory Organization of Canada (IIROC) and a member of the Canadian Investor Protection Fund (CIPF).
- As with all other stock CFDs, you can long or short AT&T according to market conditions.
- Leveraged Trading – Trade AT&T stock with a leverage of up to and enjoy potentially higher profits with minimal capital outlay on trades that end successfully.
- Competitive spreads – Trade AT&T alongside other global stocks with minimal costs. This ensures that profit margins are maximised.
- The Metatrader platform suits both short and long-term trading styles. This means investors can profit from short-term price induced moves, such as growth in subscriber numbers or potential long-term moves that can be inspired by major acquisitions.
- Automated Trading Solutions – Friedberg Direct offers automated trading; simply set your trading parameters and you no longer need to analyse the markets 24/7 to pinpoint trading opportunities.
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Disclaimer: Please note these are stock CFDs (Contracts for Difference)
When you enter into a CFD trade you don’t buy the actual stock itself but instead agree on a contract with the broker to settle the difference in value between the entry and exit price of the Stock based on the price the stock is trading at on the Exchange it is listed. That means when you trade Stocks CFDs with Friedberg Direct you get a flexibility that stock market rules often make very difficult or even impossible for some.