NEW YORK (TheStreet) -- Shares of AT&T Inc. (T) are up 0.71% to $34.94 after Chief Strategy Officer John Stankey said Mexico is poised for investment, and that he sees a lot of options, both near-term and long-term, in Latin America, Bloomberg reports.
His comments at an investor conference were the clearest sign yet that the largest U.S. phone-service provider is interested in expansion into Mexico, where American Movil (AMX) plans to sell assets to invite a new competitor into the market. AT&T has also looked at Europe for potential investments, Stankey said.
American Movil contacted AT&T and other potential suitors such as SoftBank Corp. (SFTBF) as it prepares to sell assets along the east coast of Mexico valued at about $17.5 billion, according to Bloomberg.
TheStreet Ratings team rates AT&T INC as a Buy with a ratings score of A-. TheStreet Ratings Team has this to say about their recommendation:
"We rate AT&T INC (T) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, attractive valuation levels, largely solid financial position with reasonable debt levels by most measures, notable return on equity and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- T's revenue growth has slightly outpaced the industry average of 1.7%. Since the same quarter one year prior, revenues slightly increased by 1.6%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- The debt-to-equity ratio is somewhat low, currently at 0.91, and is less than that of the industry average, implying that there has been a relatively successful effort in the management of debt levels. Despite the fact that T's debt-to-equity ratio is low, the quick ratio, which is currently 0.56, displays a potential problem in covering short-term cash needs.
- The company's current return on equity greatly increased when compared to its ROE from the same quarter one year prior. This is a signal of significant strength within the corporation. Compared to other companies in the Diversified Telecommunication Services industry and the overall market on the basis of return on equity, AT&T INC has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- The gross profit margin for AT&T INC is rather high; currently it is at 56.37%. Regardless of T's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, T's net profit margin of 10.88% compares favorably to the industry average.
- You can view the full analysis from the report here: T Ratings Report