Should I buy AT&T shares after the current dip?

AT&T Inc. (NYSE: T) shares have weakened from $21.39 to $14.67 since July 01, 2022, and the current price stands at $14.71.

At&T continues to capture customers, the dividend yield is above 7% at the current share price, and this stock may be a good choice for long-term investors.

AT&T Inc. provides telecommunication, media, and technology services worldwide. Today’s AT&T is different from its pre-pandemic days, and under CEO John Stankey, who took over in 2020, it underwent substantial changes.

The main change happened in April 2022 when AT&T’s WarnerMedia merged with cable company Discovery to form Warner Bros. Discovery, enabling AT&T to focus more on providing wireless networks, cell phone services, internet, digital television, and landline communications to its nearly 200 million customers worldwide.

Even though the company’s business remains stable, the share price of AT&T has been battered since the WarnerMedia spinoff. The current share price is down by more than 30% from AT&T’s post-spinoff high, and it is currently trading at just 5.8 times this year’s EPS estimates.

AT&T has a strong position in the market, and it continues to capture customers, particularly among post-paid phone subscribers. AT&T reached 813,000 post-paid phone net additions in the second quarter of 2022, which is the highest second-quarter total in over a decade.

It is also important to mention that AT&T’s 2022 post-paid phone net adds of 1.5 million through the first and second quarters outpaced last year’s 1.4 million for the same period.

If this trend continues, AT&T could easily exceed last year’s record-setting 3.2 million post-paid phone net adds, a total higher than the previous ten years combined.

AT&T used to trail Verizon Communications Inc. (NYSE: VZ) in its core wireless segment, but currently, AT&T is the clear leader in the U.S. with a whopping 44% market share vs. Verizon’s 31%. The company continues to invest in 5G and fiber-optic network expansion, and by 2023, AT%T plans to cover more than 200 million customers.

Now let’s take a look at fundamentals. With a market capitalization of $106.18 billion, AT&T is inexpensive and compared to Verizon, AT&T is cheaper on a price-to-sales basis.

According price-to-sales ratio (market capitalization/revenues), AT&T shares are trading at 0.62, which is nearly two times lower than the price-to-sales ratio of Verizon Communications, which is trading at a P/S of 1.15.

It is also important to mention that T-Mobile US, Inc. (NASDAQ: TMUS) trades at more than two this year’s sales and more than six times TTM EBITDA.

At&T trades at less than three times TTM EBITDA, the dividend yield is above 7% at the current share price, and for investors looking for an attractive dividend, this stock may be a good choice.

At&T’s share price has weakened more than 30% after reaching the highest level in 2022 of $21.53 on May 26, and the risk of further decline still persists.

The current support level stands at $14, while $17 represents the first resistance level. If the price falls below $14, it would be a “sell” signal, and we have the open way to $13 or even below.

On the other side, if the price jumps above $17, the next target could be $18.

AT&T has a strong position in the market, and it continues to capture customers, particularly among post-paid phone subscribers. At&T trades at less than three times TTM EBITDA, the dividend yield is above 7% at the current share price, and for investors looking for an attractive dividend, this stock may be a good choice.

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