AT&T’s PE Compresses to Lower than TTM Dividend Yield

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AT&T($NYSE:T) is currently facing market fears and its PE has compressed to 6.7x, which is now lower than its TTM dividend yield of 7.87%. This situation is created by extreme market sentiment and is not sustainable in the long term. This difference in market sentiment will likely affect AT&T’s earnings in the long term.

Market Price

AT&T’s stock price rose by 2.1% on Monday, opening at $17.1 and closing at $17.4. AT&T’s strong dividend yield and compressed PE ratio make it an attractive investment opportunity for income-seeking investors.

VI Analysis

AT&T is a large American telecommunications company with a long history and a strong track record of paying out dividends. The company’s fundamentals reflect its long-term potential, and the VI app’s Star Chart shows that AT&T is classified as a ‘cow’, a type of company that has the track record of paying out consistent and sustainable dividends. Dividend-paying companies are deemed less risky as they pursue growth at a sustainable rate. AT&T is strong in terms of assets and profitability, but is only medium in terms of dividend growth. The company has an intermediate health score of 6/10 with regard to its cash flows and debt, and is likely to safely ride out any crisis without the risk of bankruptcy.

Summary

This indicates that the market is expecting AT&T’s earnings to decline in the future. Overall, AT&T appears to be a riskier investment at this time. The company’s high dividend yield may be enticing for income investors, but the stock looks like it could continue to underperform the market in the future.