Analyzing AT&T (NYSE:T) and Lumen Technologies (NYSE:LUMN)

AT&T (NYSE:TGet Rating) and Lumen Technologies (NYSE:LUMNGet Rating) are both computer and technology companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, valuation, risk, dividends, earnings, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a breakdown of current recommendations for AT&T and Lumen Technologies, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AT&T 1 8 7 1 2.47
Lumen Technologies 2 5 0 0 1.71

AT&T presently has a consensus target price of $22.39, indicating a potential upside of 14.64%. Lumen Technologies has a consensus target price of $7.00, indicating a potential upside of 28.91%. Given Lumen Technologies’ higher possible upside, analysts clearly believe Lumen Technologies is more favorable than AT&T.

Institutional and Insider Ownership

51.9% of AT&T shares are owned by institutional investors. Comparatively, 76.0% of Lumen Technologies shares are owned by institutional investors. 0.1% of AT&T shares are owned by insiders. Comparatively, 0.8% of Lumen Technologies shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

AT&T pays an annual dividend of $1.11 per share and has a dividend yield of 5.7%. Lumen Technologies pays an annual dividend of $1.00 per share and has a dividend yield of 18.4%. AT&T pays out 41.1% of its earnings in the form of a dividend. Lumen Technologies pays out 50.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Profitability

This table compares AT&T and Lumen Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AT&T 14.44% 13.24% 4.31%
Lumen Technologies 10.95% 13.58% 2.91%

Risk & Volatility

AT&T has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500. Comparatively, Lumen Technologies has a beta of 0.99, meaning that its share price is 1% less volatile than the S&P 500.

Valuation and Earnings

This table compares AT&T and Lumen Technologies’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AT&T $168.86 billion 0.82 $20.08 billion $2.70 7.23
Lumen Technologies $19.69 billion 0.29 $2.03 billion $2.00 2.72

AT&T has higher revenue and earnings than Lumen Technologies. Lumen Technologies is trading at a lower price-to-earnings ratio than AT&T, indicating that it is currently the more affordable of the two stocks.

Summary

AT&T beats Lumen Technologies on 11 of the 17 factors compared between the two stocks.

About AT&T

(Get Rating)

AT&T Inc. provides telecommunications, media, and technology services worldwide. Its Communications segment offers wireless voice and data communications services; and sells handsets, wireless data cards, wireless computing devices, and carrying cases and hands-free devices through its own company-owned stores, agents, and third-party retail stores. It also provides data, voice, security, cloud solutions, outsourcing, and managed and professional services, as well as customer premises equipment for multinational corporations, small and mid-sized businesses, governmental, and wholesale customers. In addition, this segment offers broadband fiber and legacy telephony voice communication services to residential customers. It markets its communications services and products under the AT&T, Cricket, AT&T PREPAID, and AT&T Fiber brand names. The company's Latin America segment provides wireless services in Mexico; and video services in Latin America. This segment markets its services and products under the AT&T and Unefon brand names. The company was formerly known as SBC Communications Inc. and changed its name to AT&T Inc. in 2005. AT&T Inc. was incorporated in 1983 and is headquartered in Dallas, Texas.

About Lumen Technologies

(Get Rating)

Lumen Technologies, Inc., a facilities-based technology and communications company, provides various integrated products and services under the Lumen, Quantum Fiber, and CenturyLink brands to business and residential customers in the United States and internationally. The company operates in two segments, Business and Mass Markets. It offers compute and application services, such as cloud services, IT solutions, unified communication and collaboration solutions, colocation and data center services, content delivery services, and managed security services; and IP and data services, including VPN data network, Ethernet, internet protocol (IP), and voice over internet protocol. The company also provides fiber infrastructure services comprising high bandwidth optical wavelength networks; and unlit optical fiber and related professional services. In addition, it offers voice and other services, including private line services, a direct circuit or channel specifically dedicated for connecting two or more organizational sites; a portfolio of traditional time division multiplexing voice services; and synchronous optical network-based Ethernet, legacy data hosting services, and conferencing services. As of December 31, 2021, the company served approximately 4.5 million broadband subscribers. The company was formerly known as CenturyLink, Inc. and changed its name to Lumen Technologies, Inc. in September 2020. Lumen Technologies, Inc. was incorporated in 1968 and is headquartered in Monroe, Louisiana.

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