Shares of AT&T (T) trade at just 7.2 times earnings, compared with 22.3 for the median S&P 500 company. The stock lost 8.8% over the past twelve months, trailing a broader S&P 500 that returned 17.3%. Investors are looking at either a deeply discounted business or a fair valuation for a stagnant operation. So what does AT&T earn behind that low price?

AT&T Earns A Higher Margin Than Most Companies

The telecommunications provider retained 20.6% of its sales as operating profit over the last twelve months. The median S&P 500 company kept 18.5%. Phone and internet services generate nearly all of those sales, with the Communications segment making up 96% of fiscal 2025 revenue.

The valuation multiple looks similarly…