Definitive Analysis
Definitive Analysis
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AT&T Inc. 5.625% Global Notes d (TBC)

Company Dividend Discount ModelIndustry: Telecommunications ServicesSector: Communication Services

Valuation Snapshot

Stable Growth$14.90 - $20.20$17.61
Multi-Stage$29.81 - $32.78$31.26
Blended Fair Value$24.44
Current Price$24.97
Upside-2.14%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS-11.23%-1.50%1.141.131.372.102.082.071.871.681.641.42
YoY Growth--0.88%-17.48%-34.57%0.75%0.46%11.02%11.40%2.04%15.66%6.78%
Dividend Yield--4.58%4.57%5.51%8.24%7.74%8.13%7.33%6.74%6.60%5.71%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)22,173.00
(-) Cash Dividends Paid (M)12,339.00
(=) Cash Retained (M)9,834.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)4,434.602,771.631,662.98
Cash Retained (M)9,834.009,834.009,834.00
(-) Cash Required (M)-4,434.60-2,771.63-1,662.98
(=) Excess Retained (M)5,399.407,062.388,171.03
(/) Shares Outstanding (M)7,179.987,179.987,179.98
(=) Excess Retained per Share0.750.981.14
LTM Dividend per Share1.721.721.72
(+) Excess Retained per Share0.750.981.14
(=) Adjusted Dividend2.472.702.86
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-6.42%-5.42%-4.42%
Fair Value$14.90$17.61$20.20
Upside / Downside-40.32%-29.48%-19.08%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)22,173.0020,972.1819,836.4018,762.1317,746.0316,784.9617,288.51
Payout Ratio55.65%62.52%69.39%76.26%83.13%90.00%92.50%
Projected Dividends (M)12,339.0013,111.6013,764.3314,307.9014,752.2315,106.4715,991.88

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate-6.42%-5.42%-4.42%
Year 1 PV (M)11,891.1212,018.1912,145.25
Year 2 PV (M)11,321.1211,564.3611,810.18
Year 3 PV (M)10,672.7811,018.5811,371.77
Year 4 PV (M)9,979.9010,413.3510,860.77
Year 5 PV (M)9,268.279,774.1510,301.88
PV of Terminal Value (M)160,896.92169,678.97178,840.37
Equity Value (M)214,030.12224,467.60235,330.23
Shares Outstanding (M)7,179.987,179.987,179.98
Fair Value$29.81$31.26$32.78
Upside / Downside19.38%25.20%31.26%

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