The Phone Giants Still Rule

Despite the moaning over high share prices, AT&T and Verizon are terrific companies for investors.

Too bad there isn’t a clever portmanteau word to meld the names of the nation’s two biggest phone companies. Attizon or Veratt doesn’t roll off the tongue or please the eye the way Wintel (of PC fame) does. As far as investors are concerned, though, AT&T (symbol T) and Verizon Communications (VZ) are joined at the hip. In most respects, they are more similar than different. Both get tons of complaints about service, but they’ve produced heroic results for their shareholders.

Lately, though, some analysts have been carping that the stocks have gotten too pricey because of frenzied buying by income-starved investors. Most brokerages rate the pair some version of “neutral.” S&P Capital IQ recently had the audacity to slap a “strong sell” on Verizon, primarily due to valuation. S&P says to hold AT&T.

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Jeffrey R. Kosnett
Senior Editor, Kiplinger's Personal Finance
Kosnett is the editor of Kiplinger's Investing for Income and writes the "Cash in Hand" column for Kiplinger's Personal Finance. He is an income-investing expert who covers bonds, real estate investment trusts, oil and gas income deals, dividend stocks and anything else that pays interest and dividends. He joined Kiplinger in 1981 after six years in newspapers, including the Baltimore Sun. He is a 1976 journalism graduate from the Medill School at Northwestern University and completed an executive program at the Carnegie-Mellon University business school in 1978.