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AT&T has rebuilt its balance sheet and refocused on its core business, and the early results are beginning to show. The company reported strong first-quarter performance, with indicators pointing to the possibility of double-digit earnings growth ahead and a valuation that appears inexpensive relative to expected progress.
AT&T’s debt has come down since peaking in early 2022. The company’s credit has recovered to investment-grade status, with a BBB rating from S&P Global.
AT&T’s dividend is also positioned more securely. The payout ratio is described as only about half of the company’s estimated 2026 earnings, which suggests room for management to increase the dividend. The dividend yield is currently 4.4%.
AT&T’s focus on connectivity is contributing to growth. In the first quarter of 2026, the company added 294,000 net postpaid phone additions in the U.S. wireless market. This was below the 324,000 added in the prior year period, but it followed three consecutive quarters of at least 400,000 additions.
The wireless business, together with home internet services, makes up AT&T’s advanced connectivity segment. In the first quarter, segment revenue grew 3.6% year over year, while EBITDA grew 5.6%.
The article attributes AT&T’s improved performance to a refocus on its core phone and internet businesses after an attempt to become a media company did not succeed. With that strategy scaled back, the company’s core operations are described as thriving.
AT&T’s stock is trading at less than 11 times its estimated 2026 earnings. Management expects earnings per share to grow at a double-digit annualized rate through 2028.
Wall Street analysts expect 11% to 12% annualized growth over the next three to five years. Combined with the 4.4% dividend yield, the outlook presented suggests continued shareholder returns alongside earnings growth.
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