Sifting through a plethora of Telecommunications Services – Integrated stocks may be time-consuming, and sometimes two stocks are just too similar to determine which is the better option. If you’re on the fence about investing in Lumen Technologies Inc or Dallas, Tex-based AT&T Inc because you’re not sure how they compare, compare them on a few key metrics first.
Continue reading to see how Lumen Technologies Inc and Tex-based AT&T Inc compare on important financial parameters to see which one best matches your investing goals.
Comparing AT&T Inc. to Lumen Technologies, Inc.: Industry Leaders in Telecommunications
Dallas, Texas-based AT&T Inc. (T) and Lumen Technologies, Inc. (LUMN) are two major participants in the telecommunications business based in Monroe, La.Â
T is a global provider of telecommunications, media, and technical services. Wireless communications, data/broadband, Internet services, video services, local exchange services, long-distance services, telecommunications equipment, managed networking, and wholesale services are among its services and products.
LUMN is a technology and communications firm located in facilities that offers a variety of integrated products and services to international business and mass-market consumers. It provides network security, communications, cloud solutions, telephony, fiber infrastructure, and managed services.
The ongoing digitization of industries and remote lifestyles has increased demand for communications services to improve connectivity. Increasing investments in innovative technology could accelerate the rise of businesses that provide high-speed, continuous data access. The worldwide telecom market is estimated to reach $3.82 trillion by 2026 at a 7.4% CAGR. As a result, both T and LUMN should benefit.
LUMN stock has gained 2.3% in the last month, compared to T’s 16.2% loss. So which of these stocks is the better buy right now? Let us investigate.
Latest Developments
In 2022, T and Northrop Grumman Corporation (NOC), a multinational aerospace and defense technology business, agreed to collaborate on research to establish a digital battle network powered by AT&T 5G and NOC’s advanced mission systems to serve the United States Department of Defense (DoD).Â
This solution will assist the DoD in connecting distributed sensors, shooters, and data from all domains, terrains, and forces; it will also provide the low latency and cybersecurity protections of private 5G networks with the flexibility and scalability of T’s commercial 5G capabilities; and it will provide a critical capability to support the DoD’s vision for Joint All Domain Command and Control (JADC2). This should assist companies in cultivating long-term partnerships with the DoD.
On February 24, 2022, LUMN announced plans to provide high-speed edge computing infrastructure for Solana network node operations and developers in order to assist its worldwide community of blockchain validators, API providers, and developers.Â
With decentralized transactions at the network’s edge, the Lumen platform’s edge computing architecture and massive fiber connectivity give the Solana community with a fast, safe environment, minimize latency, and save bandwidth.Â
As interest in blockchain and other emerging technologies grows, this service should assist LUMN in expanding its market reach in the coming months.
Previous and anticipated financial performance
T’s EBIT has increased at a 5.3% CAGR over the last three years. T’s earnings per share are predicted to fall 31.4% year on year in its fiscal 2022 first quarter, which ends March 31, 2022. In the same period, sales are predicted to fall 30.8%.
Over the last three years, LUMN’s EBIT has increased at a 6.8% CAGR. Experts anticipate that ZBH’s EPS will increase 4.5% year on year in its fiscal year 2022 first quarter, which ends March 31, 2022. In the same quarter, sales are predicted to fall 6.8% year on year.
Profitability
T’s trailing-12-month revenue is about 8.6 times that of LUMN. LUMN, on the other hand, is more profitable, having a 17.7% ROE versus T’s 11.8%.
Additionally, LUMN’s gross profit margin and EBITDA margin are 56.9% and 40.7%, respectively, versus 52.7% and 33.6% for T.
Conclusion
Both AT&T Inc. and Lumen Technologies Inc. are major players in the telecommunications industry, offering a range of services and products to businesses and consumers. The increasing demand for communication services in the digitized world is expected to benefit both companies. However, when comparing their financial performance, Lumen Technologies Inc. appears to be more profitable with a higher ROE, gross profit margin, and EBITDA margin. On the other hand, AT&T Inc. has established a partnership with Northrop Grumman Corporation to provide a digital battle network for the United States Department of Defense, potentially leading to long-term partnerships. Investors looking to invest in the telecommunications industry should weigh the financial metrics and the companies’ latest developments to determine which one aligns with their investment goals.
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