Phone giant AT&T (NYSE:T) is expected to ring up Wall Street with its first-quarter 2007 earnings news tomorrow.

After the news comes out, we'll have time aplenty to dissect it. But in these few hours before we begin obsessing over AT&T's short-term progress, let's take a moment to review what investors think about it as a long-term investment. Our tool in this endeavor: Motley Fool CAPS, where we poll more than 27,000 investors for their views on well over 4,000 companies, AT&T among them. Here's what Fools have to say about the company.

Up or down?
Over 1,400 investors have submitted ratings on the company. The verdict: You can't hear a pin drop for all the cheering.

Overall, more than nine investors out of 10 rate the company likely to outperform the market going forward. Among the very best investors -- those designated as "All-Stars" on CAPS -- approval climbs to an astounding 98%. No surprise, then, that AT&T scores a strong four stars out of a possible five on CAPS.

That puts AT&T at the top of the heap in the telecom sector:

Telecom companies

CAPS rating



Citizens Communications (NYSE:CZN)


Verizon (NYSE:VZ)


Vodafone (NYSE:VOD)


Alltel (NYSE:AT)


Sprint Nextel (NYSE:S)


Qwest (NYSE:Q)


Wall Street vs. Main Street
As goes Main Street, so does Wall Street -- at least when it comes to AT&T. The analyst community tracks CAPS sentiment exactly, with 92% approval (23 buy ratings versus a pair o' sells) of AT&T.

It's no secret why. If you examine the stock's performance over the last 52 weeks, you'll see that it has beaten the market's returns by better than 40 percentage points.

Brass tacks
And what are the thoughts behind these ratings?

Bull pitch
For the most part, AT&T bulls like three things about the company: the 3.6% dividend, the firm's dominant position in the phone market, and the tie-up with Apple to offer service on the latter's new iPhone.

Bear pitch
Bears see two main problems with this thesis: First, the stock sells for a 21 trailing P/E, but is expected to grow earnings at less than half that rate (9%) over the next five years, making it look quite pricey. Second, the firm's long-distance business faces a very real threat from companies like Skype and its peers, which are fast making the concept of paying for phone calls obsolete.

Who said that?
To learn the identities of the Fools who penned these thoughts, and explore the plethora of additional financial data we've put together on the company, just click here.

Citizens Communications and Alltel are Income Investor selections, and Vodafone is an Inside Value pick. You can check out any or all of our newsletters with a free 30-day trial.

 Fool contributor Rich Smith does not own shares of any company named above. You can find him on CAPS, publicly pontificating under the handle TMFDitty, where he's currently ranked 159 out of nearly 28,000 raters. The Fool has a disclosure policy.