Warren Buffett Owns 1 Telecom Giant. Why That Stock Should Continue to Soar.

Core Viewpoint - T-Mobile is the only telecom stock currently held by Berkshire Hathaway, and it has outperformed its competitors, AT&T and Verizon, in terms of market gains over the past five years [2][11]. Company Performance - T-Mobile achieved 6.1 million postpaid net customer additions in 2024, leading to $81 billion in revenue, a 4$17 billion, a 25% year-over-year growth [8]. - T-Mobile forecasts between 5.5 million and 6 million postpaid net customer additions for 2025, with expected net cash from operating activities between $26.8 billion and$27.5 billion, indicating a 24% increase at the midpoint [9]. Competitive Advantages - T-Mobile has a competitive edge as it has only operated as a wireless carrier since its inception in 1994, avoiding legacy costs associated with landline businesses [4]. - The acquisition of Sprint provided T-Mobile with critical wireless spectra, enhancing its service quality and allowing it to rank first in overall network experience for three consecutive years [6]. Financial Metrics - T-Mobile's annual dividend payout is $3.52 per share, yielding approximately 1.3%, which is close to the S&P 500's dividend returns of about 1.35% [3]. - The company's P/E ratio stands at 27, which, while higher than its peers, has decreased from previous levels, making it potentially attractive to new investors [10]. Investment Rationale - Buffett's investment in T-Mobile aligns with his history of successful stock picking, as it is the best performer among the three major telecom stocks [11]. - T-Mobile's improved service quality and financial performance, including significant free cash flow growth, suggest it is a stock worth considering for investors [12].