Core Insights - The article discusses the contrasting dividend strategies of Alphabet and AT&T, highlighting the trade-off between high yield and growth potential in dividend-paying stocks [2][15]. Group 1: Alphabet - Alphabet initiated a dividend program last year and raised its payout by 5% to $0.21 per share, resulting in a yield of approximately 0.4% [4][5]. - Over the past five years, Alphabet's earnings per share have increased by 29.4% annually, with free cash flow reaching around $66.7 billion, of which less than 15% was used for dividends [5][11]. - Alphabet's strong market position in advertising and cloud computing, along with its dominance in the search engine and browser markets, positions it well for long-term growth [6][7]. Group 2: AT&T - AT&T's earnings per share have only increased by 15.8% over the past five years, partly due to the spinoff of media assets and loss of wireline connections [8][9]. - The company offers a high dividend yield of around 4%, which is about ten times that of Alphabet, but has not increased its dividend since a reduction in 2022 [10][11]. - AT&T's free cash flow was $19.6 billion over the past 12 months, more than double its dividend obligation, and is expected to remain sufficient despite a projected decline in wireline revenue [11][12]. Group 3: Investment Considerations - For long-term investors, Alphabet may provide better growth potential in dividend income, while AT&T may be more suitable for those closer to retirement seeking immediate income [15][16]. - If projected earnings growth rates continue, Alphabet's yield on cost could surpass AT&T's by 2035, making it a more attractive option for long-term investment [16].

Core Viewpoint - AT&T has shown strong performance in the stock market but experienced a pullback after failing to raise guidance following its second quarter results, which investors had anticipated after Verizon's positive outlook [1][13]. Subscriber Growth - AT&T added 479,000 retail postpaid subscribers in the second quarter, including 401,000 retail postpaid phone additions, benefiting from Verizon's price hike [2]. - The company lost 34,000 prepaid subscribers, which is considered less significant compared to postpaid subscribers [2]. Revenue Performance - Overall mobility-segment revenue increased by 6.7% to $21.8 billion, with mobility service revenue rising by 3.5% to $16.9 billion and equipment sales surging by 18.8% to $5 billion [3]. - Broadband ARPU climbed by 7.5% to $71.16, while fiber ARPU rose by 6.2% to $73.26, contributing to total consumer broadband revenue growth of 5.8% to $3.5 billion [4]. Fiber Investment Strategy - AT&T plans to ramp up fiber investments to reach 4 million new locations per year, aiming to double its fiber locations to 60 million by 2030 [5]. - The investment will be supported by new tax provisions allowing immediate full depreciation of certain assets [6]. Wireline Segment Challenges - The business wireline segment saw a 9.3% revenue decrease to $4.3 billion, shifting from an operating profit of $102 million to a loss of $201 million [8]. - Adjusted EBITDA for this segment fell by 11.3% to $1.3 billion [9]. Financial Highlights - Total revenue rose by 3.5% to $30.8 billion, with adjusted EPS increasing by 5.8% to $0.54, surpassing Wall Street expectations [9]. - AT&T generated $9.8 billion in operating cash flow and $4.4 billion in free cash flow, maintaining a dividend payout of over $2 billion with a coverage ratio of 2.2 times [10]. Future Guidance - The company maintained its guidance, projecting mobility service revenue growth of 3% or better and adjusted EPS between $1.97 to $2.07, down from $2.26 in 2024 [11][12]. - Future capital expenditures are expected to be between $23 billion to $24 billion annually in 2026 and 2027, with projected free cash flow exceeding $18 billion in 2026 and $19 billion in 2027 [12]. Competitive Landscape - AT&T is aggressively competing with Verizon in subscriber additions by offering better deals and maintaining lower prices [13]. - The company aims to leverage tax benefits from the "One Big, Beautiful Bill" to enhance its fiber network, especially as Verizon expands its fiber network through the acquisition of Frontier Communications [14]. Valuation Comparison - Despite the stock's pullback, AT&T trades at a forward P/E of about 13.5 based on 2025 earnings estimates, compared to Verizon's forward P/E of 9 [15]. - The valuation gap and higher yield of Verizon (about 6%) suggest a preference for Verizon over AT&T, although both companies are seen as strong long-term investments [16].

Core Viewpoint - The article discusses the potential upside for Verizon (VZ) stock, particularly in the context of the Federal Reserve's decision to cut interest rates, which could positively impact the stock's performance [1]. Group 1: Company Analysis - The author previously suggested that Verizon stock had upside potential, especially if the Federal Reserve were to cut rates [1]. - The article indicates that the Federal Reserve did indeed cut rates later, which may have implications for Verizon's stock performance [1]. Group 2: Investment Strategy - The author emphasizes a long-term investment strategy focused on strategic buying opportunities, particularly in dividend and value stocks [1]. - This investment approach has led to a high rating on Tipranks.com and a significant following on Seeking Alpha, indicating a level of credibility and expertise in the investment community [1].

Group 1 - Telecom companies have performed well despite a challenging macro environment characterized by prolonged high interest rates and tariffs [1] - AT&T has made progress after reducing its dividend, moving away from its previous status as a Dividend Aristocrat [1] Group 2 - The article emphasizes the importance of quality dividend-paying companies for building investment portfolios, particularly for lower and middle-class workers [1]

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) AT&T's unaudited consolidated financial statements for Q2 2025, including income, balance sheet, cash flows, and equity Key Financial Highlights (Q2 & H1 2025 vs 2024) | Financial Metric | Q2 2025 | Q2 2024 | YTD 2025 | YTD 2024 | | :--- | :--- | :--- | :--- | :--- | | **Total Operating Revenues** | $30,847 M | $29,797 M | $61,473 M | $59,825 M | | **Operating Income** | $6,501 M | $5,760 M | $12,255 M | $11,607 M | | **Net Income Attributable to AT&T** | $4,500 M | $3,597 M | $8,851 M | $7,042 M | | **Diluted EPS** | $0.62 | $0.49 | $1.22 | $0.96 | Key Balance Sheet Data (as of June 30, 2025) | Balance Sheet Item | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Total Assets** | $405,491 M | $394,795 M | | **Total Liabilities** | $283,914 M | $276,550 M | | **Long-Term Debt** | $123,057 M | $118,443 M | | **Total Stockholders' Equity** | $121,394 M | $118,245 M | Cash Flow Summary (Six months ended June 30) | Cash Flow Activity | 2025 | 2024 | | :--- | :--- | :--- | | **Net Cash Provided by Operating Activities** | $18,812 M | $16,640 M | | **Net Cash Used in Investing Activities** | $(11,044) M | $(6,977) M | | **Net Cash Used in Financing Activities** | $(598) M | $(13,293) M | - In December 2024, the Board authorized a **$10 billion** stock repurchase program. In the first six months of 2025, the company repurchased approximately **34 million shares** for **$958 million**[19](index=19&type=chunk) - On May 21, 2025, AT&T agreed to acquire substantially all of Lumen's mass markets fiber business for **$5.75 billion** in cash, a transaction expected to close in the first half of 2026[98](index=98&type=chunk) - The sale of AT&T's interest in DIRECTV to TPG Capital was completed on July 2, 2025. The company expects to record a significant gain on the sale in the third quarter of 2025[87](index=87&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=28&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management analyzes Q2 and H1 2025 financial results, segment performance, liquidity, and capital resources [Consolidated Results of Operations](index=29&type=section&id=Consolidated%20Results%20of%20Operations) Consolidated revenues and income increased in Q2 and H1 2025, driven by Mobility and Consumer Wireline growth Consolidated Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | **Total Operating Revenues** | $30,847 M | $29,797 M | 3.5% | | Service Revenues | $25,292 M | $25,006 M | 1.1% | | Equipment Revenues | $5,555 M | $4,791 M | 15.9% | | **Operating Income** | $6,501 M | $5,760 M | 12.9% | | **Net Income Attributable to AT&T** | $4,500 M | $3,597 M | 25.1% | - Revenue growth was driven by Mobility and Consumer Wireline, partially offset by declines in Business Wireline and unfavorable foreign exchange in Mexico[104](index=104&type=chunk) - Equity in net income of affiliates increased significantly, reflecting cash distributions from DIRECTV in excess of the investment's carrying amount. The interest in DIRECTV was sold on July 2, 2025[108](index=108&type=chunk) - A gain in the range of **$5.5 billion** is expected to be recognized in Q3 2025 from the sale of DIRECTV[110](index=110&type=chunk) [Communications Segment Results](index=30&type=section&id=Communications%20Segment%20Results) Communications segment revenue grew in Q2 2025, driven by Mobility and Consumer Wireline, despite Business Wireline decline Communications Segment Performance (Q2 2025 vs Q2 2024) | Business Unit | Revenue (Q2 2025) | % Change YoY | Operating Income (Q2 2025) | % Change YoY | | :--- | :--- | :--- | :--- | :--- | | **Mobility** | $21,845 M | 6.7% | $6,931 M | 3.2% | | **Business Wireline** | $4,313 M | (9.3)% | $(201) M | - | | **Consumer Wireline** | $3,541 M | 5.8% | $335 M | 82.1% | | **Total Communications** | **$29,699 M** | **3.9%** | **$7,065 M** | **0.9%** | Mobility Key Metrics (Q2 2025) | Metric | Value | YoY Change | | :--- | :--- | :--- | | Postpaid Phone Net Additions | 401,000 | (4.3)% | | Postpaid Phone-Only Churn | 0.87% | +17 BP | Consumer Wireline Key Metrics (Q2 2025) | Metric | Value | YoY Change | | :--- | :--- | :--- | | Fiber Broadband Net Additions | 243,000 | 1.7% | | Fiber Broadband Connections | 9.8 million | 11.8% | - Business Wireline's revenue decline was driven by a **17.3%** drop in legacy and other transitional services, which was partially offset by **3.5%** growth in fiber and advanced connectivity services[125](index=125&type=chunk) [Latin America Segment Results](index=35&type=section&id=Latin%20America%20Segment%20Results) Latin America revenue decreased due to FX, but operating income and EBITDA margin improved with subscriber growth Latin America (Mexico) Performance (Q2 2025 vs Q2 2024) | Metric | Q2 2025 | Q2 2024 | % Change | | :--- | :--- | :--- | :--- | | **Total Segment Revenues** | $1,054 M | $1,103 M | (4.4)% | | Service Revenues | $662 M | $699 M | (5.3)% | | Equipment Revenues | $392 M | $404 M | (3.0)% | | **Operating Income** | $46 M | $6 M | — | | **EBITDA** | $201 M | $178 M | 12.9% | - Revenue decreases were primarily driven by unfavorable foreign exchange impacts, which were partially offset by subscriber growth[140](index=140&type=chunk) - Total Mexico wireless subscribers grew **5.3%** year-over-year to **23.8 million**, with postpaid net additions of **183,000** in the quarter[139](index=139&type=chunk)[140](index=140&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) AT&T's liquidity improved in H1 2025, funding capital expenditures, dividends, and stock repurchases Capital Resources Summary | Metric | June 30, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | **Cash and cash equivalents** | $10,499 M | $3,298 M | | **Total debt** | $132,311 M | $123,532 M | - Cash from operating activities for H1 2025 was **$18.8 billion**, an increase from **$16.6 billion** in H1 2024[147](index=147&type=chunk)[149](index=149&type=chunk) - Capital investment, including capital expenditures (**$9.2B**) and cash paid for vendor financing (**$0.4B**), totaled **$9.6 billion** in H1 2025[151](index=151&type=chunk)[152](index=152&type=chunk) - During H1 2025, the company repurchased **$958 million** of common stock and paid **$4.1 billion** in dividends[159](index=159&type=chunk)[160](index=160&type=chunk) - The company maintains a **$12 billion** revolving credit agreement, which was undrawn as of June 30, 2025[162](index=162&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) AT&T manages market risks using derivative instruments, primarily cross-currency swaps for foreign-denominated debt - The company uses cross-currency swaps to hedge exposure to foreign currency exchange rates and interest rates on its foreign-denominated debt[169](index=169&type=chunk) - As of June 30, 2025, the notional value of these cross-currency swaps was **$36,499 million**, with a net fair value of **$(890) million**[169](index=169&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls were effective as of June 30, 2025, with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were effective as of the end of the quarter[170](index=170&type=chunk) - No material changes to internal control over financial reporting were identified during the most recent fiscal quarter[171](index=171&type=chunk) PART II – OTHER INFORMATION [Item 1A. Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) Updated risk factors highlight challenges in business transformation and AI integration, including incorrect AI outputs and data breaches - The company may not realize the expected benefits from its business transformation initiatives, which are designed to reduce costs, streamline operations, and improve customer experience[177](index=177&type=chunk) - The use of artificial intelligence (AI) introduces risks, including the potential for incorrect or harmful outputs, the release of private information, and infringement of intellectual property, which could expose the company to liability and reputational damage[177](index=177&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=42&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) Details Q2 2025 common stock repurchases: **34.5 million shares** for **$960 million** under a **$10 billion** authorization Common Stock Repurchases (Q2 2025) | Period | Total Shares Purchased | Average Price Paid Per Share | Shares Purchased as Part of Publicly Announced Program | | :--- | :--- | :--- | :--- | | April 2025 | 16,756 | $28.44 | — | | May 2025 | 6,491,464 | $27.43 | 6,400,000 | | June 2025 | 27,977,713 | $27.96 | 27,974,887 | | **Total Q2** | **34,485,933** | **$27.86** | **34,374,887** | - The repurchases were made under a **$10 billion** authorization approved in December 2024, which has no expiration date. As of June 30, 2025, approximately **$9.04 billion** remained available under this program[178](index=178&type=chunk)[179](index=179&type=chunk)

Market Overview - The market capitalization of major US stocks shows varied performance, with Oracle at 762.30 billion, Mastercard at 321.36 billion, and Visa at 770.15 billion, reflecting increases of +0.66%, +0.86%, and +0.68% respectively [3] - Exxon Mobil's market cap is 679.53 billion, with a slight decrease of -0.98%, while Johnson & Johnson and Netflix show minor changes of -0.08% and -0.05% respectively [3] - Companies like Wells Fargo and Cisco have market caps of 270.15 billion and 279.59 billion, with respective increases of +0.98% and -0.58% [3] Notable Stock Movements - T-Mobile US Inc experienced a significant increase of +6.20%, reaching a market cap of 272.19 billion [3] - General Electric and Coca-Cola saw market caps of 285.05 billion and 298.76 billion, with increases of +0.37% and +0.91% respectively [3] - Companies like Disney and Goldman Sachs have market caps of 229.06 billion and 221.80 billion, with slight changes of +0.01% and -0.60% [3] Sector Performance - The technology sector shows mixed results, with Intel at 991.05 billion, down -3.28%, while AMD increased by +2.46% to 254.92 billion [5] - The consumer goods sector is represented by companies like Procter & Gamble and Coca-Cola, with market caps of 371.68 billion and 298.76 billion, showing slight increases [3][4] - The energy sector, represented by Exxon Mobil and Chevron, shows varied performance, with Exxon down -0.98% and Chevron up +0.66% [3] Summary of Key Companies - Oracle's market cap stands at 762.30 billion, reflecting a positive trend [3] - Mastercard and Visa show strong performance with market caps of 321.36 billion and 770.15 billion, both increasing [3] - Companies like Pfizer and Comcast have market caps of 1579.81 billion and 1332.00 billion, with Pfizer showing minimal change and Comcast down -3.16% [4][5]

Group 1 - AT&T Inc. reported better-than-expected earnings for the second fiscal quarter, surpassing both bottom and top line expectations [1] - The strong performance was driven by significant growth in the company's core broadband operations [1] - AT&T added 243 thousand new subscribers to its broadband service during the quarter [1]

Group 1 - AT&T has been the best-performing stock among the three major US telecommunications companies since the rollout of its 3-year plan in December 2024 [1] - The author has a long-term investment strategy focused on matching S&P 500 returns with lower volatility and higher income [1] - The investment approach emphasizes buying when prices are low relative to intrinsic value, regardless of asset class, market cap, sector, or yield [1] Group 2 - The article expresses the author's personal opinions and does not involve compensation from any company mentioned [2] - Seeking Alpha clarifies that past performance does not guarantee future results and that the views expressed may not reflect the platform's overall stance [3]

AT&T beat second-quarter financial estimates on Wednesday morning, as it added more phone but fewer internet subscribers than analysts had forecast. https://t.co/hDAalcgnv1 ...

Core Viewpoint - The communication services sector, including AT&T, is performing strongly in 2025, with AT&T's stock rising over 19% and the sector gaining 11.41% compared to the S&P 500's 7.28% gain [1][2]. Financial Performance - AT&T reported Q2 EPS of 54 cents, exceeding the consensus estimate of 51 cents, resulting in a trailing 12-month P/E ratio of 16.79 [2]. - The company expects earnings to grow by 6.07% next year, from an annualized $2.14 per share to $2.27 per share, with a forward P/E ratio of 13.30, indicating a 20.78% improvement [3]. - Q2 revenues were $30.8 billion, up from $29.8 billion in Q2 2024, with net income of $4.9 billion compared to $3.9 billion in the same period [4]. Business Segments - Mobility service revenues increased by 3.5% year-over-year to $16.9 billion, while consumer fiber broadband revenues rose by 18.9% year-over-year to $2.1 billion [4][5]. - The company added 401,000 postpaid phone subscribers, 243,000 AT&T Fiber subscribers, and 203,000 AT&T Internet Air subscribers in Q2 [5]. Shareholder Returns - AT&T repurchased approximately $1 billion of its common shares as part of a $10 billion share repurchase authorization [5]. - The company maintains a dividend yield of 4.06%, with an annual dividend of $1.11 per share and a payout ratio of 68.10% [7]. Market Position and Competition - AT&T is the third-largest wireless provider in the U.S., with a communications infrastructure reaching 290 million people across approximately 24,000 cities and towns [10]. - The company has invested over $145 billion in network buildout since 2019, enhancing its competitive position against rivals like T-Mobile and Verizon [10][9]. Analyst Ratings and Price Target - Analysts have a consensus Moderate Buy rating for AT&T, with 18 out of 25 analysts assigning a Buy rating and an average price target of $29.17, indicating a potential upside of 6.04% [11].