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AT&T TThere was a time when AT&T (NYSE:T) ruled the smartphone world with its exclusive arrangement with Apple. Investors are probably wishing for a return to those days. Since the end of that exclusivity, AT&T has done little. Where is the profit growth coming from?

We will learn more from the company when it reports earnings next week. Don’t be fooled by the 5% dividend yield. There is trouble owning this stock at these levels.

Mainly, profit growth isn’t there. Analysts expect profits to improve by 7% in 2013. At current prices, the stock trades for 13 times 2013 estimated earnings. Paying double the expected growth rate simply does not add up. And let us not forget about potential problems at Apple (NASDAQ:AAPL). Sales there might be weak.

If so, AT&T could be in for some real pain. I’d sell this one before the news.

Article printed from InvestorPlace Media,

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