Yielding 4.5%, Should Dividend Stock Investors Buy AT&T Stock? | T Stock Analysis

Parkev analyzes AT&T's recent move to expand its share repurchase program, noting that management believes there is a disparity between the company's operating fundamentals and its stock valuation. Parkev agrees with this assessment, despite observing that AT&T's revenue history is complicated by major divestitures. Parkev expects future revenue growth to remain in the low single digits (1% to 4%), but suggests that if the company can achieve mid-single-digit growth or maintain operational leverage, it could deliver strong earnings per share growth for investors.

Parkev points out that AT&T has successfully increased its operating profit margin from 17% in 2017 to 21% recently. However, Parkev expresses caution regarding the company's return on invested capital (ROIC), particularly as the industry prepares for the 6G upgrade cycle before 2030. Parkev notes that AT&T's historical ROIC during 4G and 5G rollouts was not strong, which remains a risk for future capital expenditures.