The stock market isn't having a great year, with the S&P 500 down 0.4% at the time of this writing. Not all companies have been equally affected by tariff announcements and the possibility of a recession, though. AT&T (T 0.83%) has been one of the better defensive stocks in 2025, as it's currently up 20.2% on the year.
Some companies decide to split their stock after a big increase in share price. AT&T hasn't had a stock split in decades, so let's see if that's likely to change soon and where this telecom company stands as an investment.
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AT&T's stock split history
AT&T has completed three forward stock splits: A 3-for-1 split in 1987 and 2-for-1 splits in 1993 and 1998. It also completed a 1-for-5 reverse stock split in 2002, going from just over $5 per share to $25.41.
Forward stock splits and reverse stock splits both affect a company's number of outstanding shares, but in opposite ways. A forward stock split means more shares for investors and a lower share price, which can be helpful when the company's share price has gotten expensive. A reverse stock split means fewer shares and a higher share price, and it's sometimes done if a stock is in danger of being delisted because its share price is too low.
AT&T isn't in a position where it needs to complete a forward or reverse stock split. Shares are under $30 as of May 22, so they're already affordable. And the share price isn't so low that a reverse stock split makes sense.
However, AT&T did announce something better than a stock split at the end of 2024. It plans to return $40 billion to shareholders through 2027, equally split between dividends and share buybacks. When a company buys back its shares, the number of outstanding shares decreases. Investor holdings generally get more valuable, since they now own a greater share of the company.
Why is AT&T outperforming the market in 2025?
AT&T, along with competitors Verizon Communications (NYSE: VZ) and T-Mobile US (NASDAQ: TMUS), are generally considered good safe havens during economic uncertainty. Their main sources of revenue are wireless phone and internet service, which are services that people pay for every month and rarely give up.
In AT&T's case, it reported $21.6 billion in revenue for the first quarter of 2025, and 77% of that ($16.7 billion) came from services. Operating income was $6.7 billion, a 2.4% year-over-year increase. Compared to its main competitors, AT&T trails Verizon by almost $3 billion in revenue, but is ahead of T-Mobile by nearly $10 billion.
T Revenue (Quarterly) data by YCharts.
Those quarterly revenue numbers for AT&T surpassed analyst expectations, and it beat expectations the previous quarter, as well. Overall, AT&T has improved its balance sheet since taking on large amounts of debt for media acquisitions that didn't pan out, most notably the Time Warner deal. Since the beginning of 2020, AT&T has reduced its net debt by $32 billion.
Another area where AT&T is doing well lately is subscriber growth. It added 324,000 postpaid phone customers in Q1. That was much better than Verizon, which lost 289,000, but not as good as T-Mobile, which added 495,000.
Should you invest in AT&T?
AT&T is most appropriate for investors looking for stability in a turbulent market. It has a resilient business -- revenue might dip if customers downgrade their plans or stop upgrading their smartphones to cut back on their expenses, but it probably won't fall off a cliff. It's also not expensive, with a forward price-to-earnings ratio under 14.
This stock may be worth considering if you want to build passive income from dividend investing. AT&T has a fairly high dividend yield (4% at the current share price). But it's also worth mentioning that AT&T cut its dividend in 2022, a necessary step to free up more cash and pay down debt. Given the $20 billion AT&T is planning to spend on dividends through 2027, it could increase the payout.
Even though AT&T has outperformed the market this year, it'd be overly optimistic to expect that going forward. If we look further back, AT&T has underperformed the S&P 500 over the last three, five, and 10 years. This isn't the right stock for anyone looking to maximize growth. If you're looking for a company that may split its stock soon, AT&T isn't the best choice, either. It makes the most sense as a defensive investment that pays a healthy dividend.
