Is AT&T a Buy?

Core Viewpoint - AT&T has experienced a significant stock rally of nearly 60% over the past year, marking a turnaround from a decade of poor performance [1][2] Financial Performance - The company has reduced its long-term debt from a peak of $200 billion to $123 billion, improving its financial health and obtaining an investment-grade credit rating [3] - AT&T's price-to-earnings (P/E) ratio has increased from under 9 to 18, reflecting a healthier business [4][5] Growth Prospects - AT&T's core business is facing slow growth, with guidance for low-single-digit revenue growth this year and an estimated annual earnings growth of just 4% over the next three to five years [6] - The current valuation at 18 times earnings may be considered expensive given the slow growth, leading to skepticism about the continuation of the stock's recent performance [7] Investment Considerations - AT&T offers a dividend yield of 4.1%, supported by a manageable 52% payout ratio, making it attractive for income-focused investors [9] - The stock has a low beta of 0.52, indicating lower volatility compared to the broader market, which may appeal to conservative investors [10] - While the potential for substantial returns may be limited, AT&T could still be a solid buy for retirees and income-focused investors [11]