AT&T Beats Earnings, Launches $10B Buyback at Cheap Valuation
AT&T topped earnings expectations and unveiled a $10 billion buyback program, yet the stock still trades at just 8x earnings with a 4.6% dividend yield.
If you've been sleeping on AT&T, this might be your wake-up call. The telecom giant just posted a better-than-expected earnings report, announced a massive $10 billion share buyback program, and — here's the kicker — the stock is still priced like nobody got the memo. At just 8 times earnings, it's the kind of valuation that makes value investors do a double-take.
Let's break down what a buyback actually means for you as a potential shareholder. When a company repurchases its own shares, it reduces the total number of shares floating around in the market. That generally means each remaining share becomes a slightly bigger slice of the pie — which can support the stock price and boost metrics like earnings per share over time. A $10 billion commitment is not a rounding error; that's a serious signal that management believes the stock is undervalued.
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Then there's the dividend yield, currently sitting at 4.6%. In a world where savings accounts are slowly starting to lose their post-rate-hike appeal, a nearly 5% yield from a major blue-chip telecom is worth paying attention to. Combine that income stream with the buyback tailwind and you've got a setup that income investors tend to get pretty excited about.
The big question, of course, is whether AT&T can sustain this momentum. The company has spent years shedding debt and refocusing on its core wireless and fiber broadband business after some famously expensive media detours. Beating on earnings suggests that restructuring effort may finally be paying off in a meaningful way — though investors will want to keep an eye on subscriber growth and free cash flow in the quarters ahead.
For anyone hunting for value in a market that often feels overpriced, AT&T's current setup — cheap multiple, solid yield, and a management team putting real money behind a buyback — checks a lot of boxes. Continue reading at Yahoo Finance.
