Definitive Analysis
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Definitive Analysis

Financial Statements

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Sector

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

Company Dividend Discount ModelIndustry: Telecommunications ServicesSector: Communication Services

Valuation Snapshot

Stable Growth$17.81 - $24.87$21.34
Multi-Stage$51.06 - $56.38$53.67
Blended Fair Value$37.50
Current Price$24.97
Upside50.19%
DecisionBuy

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 Rate6.56%6.56%6.56%
Growth Rate-6.42%-5.42%-4.42%
Fair Value$17.81$21.34$24.87
Upside / Downside-28.66%-14.55%-0.40%

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 Rate6.56%6.56%6.56%
Growth Rate-6.42%-5.42%-4.42%
Year 1 PV (M)12,174.0312,304.1112,434.20
Year 2 PV (M)11,866.2112,121.1612,378.82
Year 3 PV (M)11,452.8011,823.8712,202.88
Year 4 PV (M)10,964.0711,440.2611,931.80
Year 5 PV (M)10,424.5010,993.4911,587.06
PV of Terminal Value (M)309,746.01326,652.51344,289.31
Equity Value (M)366,627.61385,335.41404,824.06
Shares Outstanding (M)7,179.987,179.987,179.98
Fair Value$51.06$53.67$56.38
Upside / Downside104.50%114.93%125.80%

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