AT&T(US:T) 美股研究社·2025-11-27 14:24Core Viewpoint - AT&T presents an attractive buying opportunity following its Q3 2025 earnings report, driven by strong cash flow guidance and an updated capital allocation plan that enhances flexibility [1]. Cash Flow and Dividend Insights - The current free cash flow (FCF) guidance supports existing dividends and future growth, with Q3 2025 FCF at $4.9 billion, up from $4.6 billion year-over-year. The full-year FCF guidance is set at $16 billion to $16.5 billion, significantly reducing capital return plan risks and indicating potential dividend increases [2][5]. - The estimated annual dividend commitment is approximately $7.9 billion, based on a quarterly dividend of $0.2775 per share and the current share count [4]. Capital Allocation and Debt Management - The company reduced net debt by $6.9 billion year-over-year, from $125.8 billion to $118.8 billion, enhancing its balance sheet and providing greater flexibility for investments and shareholder returns. In Q3 2025, AT&T invested $5.3 billion, focusing on fiber and 5G network development, while returning $3.5 billion to shareholders through dividends and stock buybacks [9][12]. - The stock buyback plan for FY 2025 is set at $4 billion, with a notable buyback yield of 2.58%, which is rare in the telecom sector [12][14]. Dividend Payout Ratios and Historical Context - The current dividend payout ratio is 41.1%, significantly below the historical average of 58.2% since 2016 and at a 10-year low [7]. - The long-term outlook for dividends appears optimistic, with the potential for a return to dividend growth likely to improve investor sentiment and boost valuations [18]. Valuation Metrics - The stock is currently priced attractively, with a forward P/E ratio of 12.5. The PEGY ratio, which accounts for dividend yield and growth, is approximately 1.08, indicating a favorable valuation compared to historical standards [16].