Investing decisions are made from a mosaic of data, yet synthesizing what matters can be tough. Enter the Fool poll. We show you the Big Headlines; you tell us what's factoring into your investing decisions and help your fellow Fools in the process.
Telecom's twin titans -- AT&T
Big Red booked $0.51 in per-share earnings on $26.99 billion in revenue. Post-paid net more than doubled to 906,000 and Verizon now claims 104 million wireless connections, including 88.4 million retail customers. AT&T ended Q1 with 97.5 wireless subscribers.
And yet, looking back, it seems neither company has won the hearts of buyers of Apple's
So if these two are more evenly matched than pundits had suspected, the question now is which one is the better buy for long-term investors? Let's dig into the numbers:
|CAPS stars (out of 5)||**||****|
|Normalized net income growth||(10.1%)||(2%)|
|Return on capital||6.9%||7.8%|
|Levered free cash flow||$8,736||$12,570|
Source: Capital IQ, a division of Standard & Poor's.
*All metrics calculated over the trailing 12 months.
^Except for percentages, all numbers in millions.
Three things stand out it this table:
- Both companies produce extraordinary cash flows after accounting for debt, interest, and working capital needs.
- Both pay dividends that yield well above the market average. Meaty dividends tend to pay off well for investors.
- But in terms of relative valuation, analysts expect Verizon to grow profits more than twice as fast as AT&T (excluding the effects of its planned T-Mobile merger) and Sprint Nextel
over the next five years. (NYSE: S)
If you believe Wall Street is right, then Verizon is the no-brainer buy among these three. But are analysts' estimates trustworthy? I'm asking you. Please vote in the poll below and then leave a comment to let us know which telecom stock you'd buy.
AT&T is a Motley Fool Inside Value pick. Apple is a Motley Fool Stock Advisor selection. Motley Fool Options has recommended members create a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days.
Fool contributor Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team. He owned shares of Apple at the time of publication. Check out Tim's portfolio holdings and Foolish writings, or connect with him on Twitter as @milehighfool. You can also get his insights delivered directly to your RSS reader. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool owns shares of Apple and is also on Twitter as @TheMotleyFool. Its disclosure policy is a screaming bargain.