We rate this segment as a draw between LUMN and AT&T. However, it is struggling to generate any sort of meaningful growth in this business while also having to pour a lot of money into it via capital expenditures. It spun off its media assets along with a large pile of debt, and now is solely focused on its core telecommunications business. AT&T also offers broadband fiber and legacy telephone services to residential customers.Īlso similar to LUMN, AT&T has recently made moves to streamline its business model and deleverage its balance sheet. Its clients include individuals, small and mid-sized businesses, multinational corporations, and governments. It also offers similar services to LUMN, including security, cloud solutions, data, and outsourcing services. Meanwhile, AT&T operates a more broadly diversified telecommunications business as it offers wireless voice and data communications services, wireless computing devices, handsets, data cards, and carrying cases. However, organic revenue declines are decelerating, and management continues to believe that organic revenue growth is only a year or two away for the company. Thus far, management has struggled to build a sustainable business model that is able to generate stable or even growing cash flows. Recently, LUMN has sold off several of its non-core businesses and assets in an effort to deleverage the balance sheet and streamline its capital expenditure budget in order to be able to maximize capital investments into its growthiest and best-positioned assets. However, these capabilities have as of yet to translate into generating strong overall topline growth for the company. LUMN highlights its edge computing services and significant quantum fiber growth runway as key competitive advantages for its business.
It is also investing aggressively in rapidly growing its Quantum Fiber business as it seeks to capitalize on the growing demand for fiber infrastructure services. Within these segments, it offers various telecommunications related services, such as cloud services, managed security services, intellectual property and data services information technology solutions, colocation and data center services, and unified communication and collaboration solutions. LUMN operates two main business segments: Business and Mass Markets. In this article, we will compare them side by side and offer our take on which one is a better buy. While LUMN offers a vastly superior current dividend yield, AT&T has an investment grade balance sheet, implying that it is lower risk. Both Lumen Technologies ( NYSE: LUMN) and AT&T ( NYSE: T) are telecommunications businesses that currently offer very attractive dividends yields of 10.2% and 6.5%, respectively.
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