AT&T Yields 4.7% and Trades At 8 Times Earnings. Is the SpaceX Threat Really Worth That Discount?
Here's a look at AT&T stock in light of the competitive threat from SpaceX.
Overview
AT&T (NYSE: T) appears to face a significant threat from Space Exploration Technologies (NASDAQ: SPCX). COO Gwynne Shotwell announced that SpaceX's connectivity segment, Starlink, will compete with AT&T, Verizon, and T-Mobile as a full-fledged wireless carrier.
Admittedly, such a move appears bleak for AT&T shareholders, since Starlink can cover the entire planet if the law allows, whereas AT&T can cover only the populated parts of the U.S. However, AT&T's 4.7% dividend yield stands out compared to SpaceX, which offers no dividend.
Details
Moreover, AT&T trades at a massive valuation discount to SpaceX, and even with a recent pullback, the competitive threat from SpaceX probably does not justify a discounted valuation for AT&T stock for two reasons.
Source
Originally published at www.fool.com.