AT&T Plans to Return $45 Billion to Shareholders. Is the Stock a Buy for 2026?

AT&T (NYSE: T) chopped its dividend by astir 50% successful 2022. That determination followed the spinoff of WarnerMedia, undoing what, successful hindsight, proved to beryllium a disastrous acquisition. Those 2 decisions acceptable AT&T up to perchance instrumentality $45 cardinal successful currency to investors betwixt 2026 and 2028.

Here's what you request to cognize if you are reasoning astir buying AT&T banal today.

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After the WarnerMedia spinoff, AT&T was saddled with a precise dense indebtedness load. The dividend chopped that accompanied the spinoff was intended to let AT&T to absorption connected strengthening its equilibrium sheet. Roughly 4 years aft the spinoff, the telecommunications giant's full indebtedness is lower, and its leverage has declined.

That frees the institution up to instrumentality much wealth to shareholders. In 2025, the institution returned $12 cardinal done dividends and banal buybacks. The program for the adjacent 3 years is to instrumentality $45 billion. At this constituent successful time, the committee of directors isn't intending to summation the dividend, truthful the large communicative is going to beryllium much banal buybacks.

After reporting full-year 2025 net and announcing its volition to instrumentality $45 cardinal to shareholders, AT&T's banal terms rocketed higher, rising 15% successful conscionable 5 days. That's a sizable move, and it mightiness alteration the equation for a batch of investors.

For example, the stock's price-to-sales and price-to-book-value ratios are some supra their five-year averages. Losses implicit that span don't let for a five-year mean price-to-earnings (P/E) stat, but AT&T's price-to-forward P/E is besides supra its five-year average. In different words, the banal looks a small costly close now. Value investors astir apt won't beryllium interested.

While the 4% dividend output is charismatic connected an implicit basis, the deficiency of dividend maturation is simply a large negative. Dividend investors should astir apt skip AT&T, too, since akin yields are disposable from companies with agelong histories of dividend growth.

That leaves maturation investors arsenic the astir apt buyers. However, AT&T truly isn't a maturation story, contempt its plans to put heavy successful fibre optic cables. If maturation is your thing, you tin easy find much charismatic opportunities.

All in, contempt being 1 of the world's largest communications companies, AT&T astir apt won't beryllium charismatic to astir investors astatine this time.