AT&T: 25% Upside In This Beaten-Down Dividend Aristocrat

Today’s article will discuss AT&T (T). Although AT&T appears to me like one of the most widely discussed names here on SeekingAlpha, I wanted to provide a comprehensive discussion of the perceived risks / uncertainties as well as what I view as the key investment highlights that ultimately drove me build a position in recent months. Taking it one step further, I developed a multi-case DCF to quantify the various scenarios (both to the up- and downside) for AT&T which supports my view that risk / reward is skewed favorably to build a position in the Company now while being paid dividends at record levels.
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2018 YTD Share Price Performance and Drivers / Risks AT&T’s stock has had a rough year so far, being by far the worst performer among its telecom peers.

Source: Axia; data per CapitalIQ
There were several drivers and risks perceived by the market that were responsible for the underperformance:
1. Highly Competitive Mobile Phone Segment: The last few years have been extremely tough for all mobile phone network providers, including AT&T. In an effort to gain market share, major players started to aggressively undercut each other on price, driving down average revenue per user (“ARPU”) for AT&T... Read more