AT&T vs T-Mobile Which Offers More Value?

AT&T and T-Mobile are two prominent telecommunications companies in the United States, both offering a range of services such as wireless communication, broadband internet, and media entertainment. The stocks of these companies have attracted investors due to their strong market presence and potential for growth in the rapidly evolving technology sector. While AT&T has a long-standing history and diversified business portfolio, T-Mobile has gained momentum in recent years with its innovative offerings and competitive pricing. Investors must consider factors such as market trends, financial performance, and regulatory issues when evaluating these stocks.

AT&T or T-Mobile?

When comparing AT&T and T-Mobile, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between AT&T and T-Mobile.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. AT&T has a dividend yield of 4.7%, while T-Mobile has a dividend yield of 1.22%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. AT&T reports a 5-year dividend growth of -11.11% year and a payout ratio of 90.45%. On the other hand, T-Mobile reports a 5-year dividend growth of 0.00% year and a payout ratio of 29.24%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with AT&T P/E ratio at 18.79 and T-Mobile's P/E ratio at 26.10. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. AT&T P/B ratio is 1.66 while T-Mobile's P/B ratio is 4.21.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, AT&T has seen a 5-year revenue growth of -0.32%, while T-Mobile's is 0.30%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with AT&T's ROE at 8.72% and T-Mobile's ROE at 16.35%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $23.26 for AT&T and $230.73 for T-Mobile. Over the past year, AT&T's prices ranged from $15.94 to $24.03, with a yearly change of 50.75%. T-Mobile's prices fluctuated between $153.84 and $248.15, with a yearly change of 61.30%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.