AT&T (NYSE:T): The fastest horse in the race of capital spending

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By Thomas Copeland on September 11, 2014 Financial

AT&T INC (NYSE:T) has become the largest capital spending corporation in the U.S for the third consecutive time. It spent almost $20.6 Billion on a brand new plant and other equipment for its factories around the country. Analysts say that Verizon Communications (NYSE:VZ), the telecom juggernaut is in the second with a spending of $15.4 billion in the U.S; followed by Exxon Mobile (NYSE:XOM) with 11 Billion, Chevron (NYSE:CVX) at 10.6 billion and Walmart (NYSE:WMT) at 8.7 billion.

Analysts have been keenly observing the capital investment of the top 25 corporations and almost all of them have increased their purchases over the year. It is a good sign for the market as investor interest will increase in the country and ultimately it will prove fruitful for the market and the country as well. Analysts believe that the government should appreciate faster capital spending growth through some policies that encourage investment within the US.

The investors all around the globe have been showing a lot of interest in telecommunications and energy, hence the government should focus explicitly on introducing policies that encourage domestic and foreign investors to come and invest in these sectors. Investments in these sectors would help grow productivity and employment in the country by creating new jobs. Energy and telecommunications along with cable technology are the sectors booming and the government should make the most out of this lucrative situation.

Telecom and the cable industry have been leading spenders since many years, with an investment of 46 billion only last year. This is followed by the oil and natural gas industry with an investment totaling $40 billion and the internet and technology ranking third with $23 billion. AT&T INC (NYSE:T) is expanding its fiber optic network for households with this investment while Verizon Communications (NYSE:VZ) is working on its 4G wireless Network.

Google Inc (NASDAQ:GOOGL), which is among world’s largest corporations missed out on the list last year but has come back with a bang. Now ranking 12^th Google Inc (NASDAQ:GOOGL) too has been expanding its territories- making acquisitions and taking further steps to reach the top. The world’s largest search engine has Youtube, Android and many other large subsidiaries under its belt to make money for it which is where the investment budget comes from.

Also one interesting thing is that the first are seeking a greater and long term productivity strategy where instead of creating more jobs for the economy, they are focusing on more productivity using less workers. Corporations want this solely for the reason of investor trust and a larger promised return which has to come from somewhere. Hence the market for energy, telecommunications, oil and natural gas all across the globe is a lucrative industry to invest in. The government should encourage large capital spending because it is in itself evidence that the corporation that is spending is also seeking in return strong enough benefits for it to be worth it to spend millions in capital expenditure.