AT&T (T +0.61%) cut its dividend by nearly 50% in 2022. That move followed the spinoff of WarnerMedia, undoing what, in hindsight, proved to be a disastrous acquisition. Those two decisions set AT&T up to potentially return $45 billion in cash to investors between 2026 and 2028.
Here's what you need to know if you are thinking about buying AT&T stock today.
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AT&T made the best of a bad situation
After the WarnerMedia spinoff, AT&T was saddled with a very heavy debt load. The dividend cut that accompanied the spinoff was intended to allow AT&T to focus on strengthening its balance sheet. Roughly four years after the spinoff, the telecommunications giant's total debt is lower, and its leverage has declined.
That frees the company up to return more money to shareholders. In 2025, the company returned $12 billion through dividends and stock buybacks. The plan for the next three years is to return $45 billion. At this point in time, the board of directors isn't intending to increase the dividend, so the big story is going to be more stock buybacks.
Is the stock worth buying in 2026?
After reporting full-year 2025 earnings and announcing its intention to return $45 billion to shareholders, AT&T's stock price rocketed higher, rising 15% in just five days. That's a sizable move, and it might change the equation for a lot of investors.
For example, the stock's price-to-sales and price-to-book-value ratios are both above their five-year averages. Losses over that span don't allow for a five-year average price-to-earnings (P/E) stat, but AT&T's price-to-forward P/E is also above its five-year average. In other words, the stock looks a little expensive right now. Value investors probably won't be interested.
NYSE: T
Key Data Points
While the 4% dividend yield is attractive on an absolute basis, the lack of dividend growth is a big negative. Dividend investors should probably skip AT&T, too, since similar yields are available from companies with long histories of dividend growth.
That leaves growth investors as the most likely buyers. However, AT&T really isn't a growth story, despite its plans to invest heavily in fiber optic cables. If growth is your thing, you can easily find more attractive opportunities.
All in, despite being one of the world's largest communications companies, AT&T probably won't be attractive to most investors at this time.
