A T & T US

This is your classic bond surrogate. Between AT&T and Verizon (VZ-N), it is almost a duopoly. Pays an excellent dividend of close to 5%, and trades at a very reasonable valuation. Thinks their merger with Time Warner will go through and make them stronger.

The kind of stock you own for the long-term. He wouldn’t get shaken out because of anything to do with interest rates. This has a 4.6% dividend yield, and he can see the stock still having some upside.

AT&T (T-N) or Verizon (VZ-N)? Chart shows this one has outperformed by about 10%. Within the sector, there is lots of news. One way to try and resolve this is to start a position in iShares Trust Dow Jones U.S. Telecom Sector Fund (IYZ-N), and you are probably going to see procyclical names again. The sector lagged a little, and as we get past the middle of the year this area should probably pick up.

Despite the last few days when this company rallied, the stock sold off way too hard since August. They made a strategic acquisition with DirecTV, and also a $100 billion bid for Time Warner. This is important, because the company understands they cannot survive alone as a wireless telephone company. They are trying to become end to end, so they own the wireless spectrum, they own the video with DirecTV, and now they are getting content with HBO. Dividend yield of 5%.

This and Verizon (VZ-N) in the US, are suffering from the same thing that Canadian telcos are. Low growth, people disconnecting land lines, people disconnecting cable TV to some degree. The lines are blurring between all these companies. If you are buying this, it is really for the dividend, not the growth. He is not crazy about the sector because, as a dividend stock, it is vulnerable to rising rates. He sees the whole sector coming down if bond yields continue to rise.

Doesn’t think the dividend on this is safe. The problem is that they are just owing so much money. They are trying to acquire Time Warner, and will have to borrow money if the deal goes through. Feels the company is borrowing too much money. There are better names for you to buy.

Mr. Trump was adamant that he did not want to see a merger with Time Warner (TWX-N). However, he has also spoken a lot about getting rid of regulation allowing businesses to move forward. She sold her holdings, as she doesn’t know what business they are in any more, and is very concerned that the culture of providing phone services, and now cellular services, is so incredibly different than the culture it takes to run a Time Warner media company successfully. She is disturbed by this merger.

If the Time Warner deal goes through, and he thinks it is a big if because of regulatory issues, he wouldn’t buy it here, but would stand back to see how it plays out. If it is completed, it could be very interesting.

It has been shocking in the last number of months. They have been able to sustain the dividend, but her firm was taking profits earlier. They have changed a lot over the years. The business is fine, but the stock is a bit ahead of itself. The dividend has caused it to get a bit ahead of itself.

(Market Call Minute.) She would hold this for the income.

(Market Call Minute.) They have basically camped out on the wire line business. Verizon has gone to the wireless model. Pays a great dividend, so you can’t go wrong as an income stock.

She likes a lot of the very stable telecom companies. Both AT&T and Verizon (VZ-N) look similar to her, and offer similar dividends. Both would be income plays, not a price appreciation play. 4.7% dividend.

Telcos have been performing very well. So long as we are in a lower rate environment, this should continue to perform well.

(Market Call Minute) It has a 4-5% dividend. Take profits if you have owned it a long time.

There is a chase for yield with interest rates being lower for longer. This yields about 4.6%, which is what investors want. Steady growth, so it is a low beta name, especially for investors who are more cautious. Trading at about 14X PE, only a notch away from a 2012 10-year high, so it is getting up there in terms of lofty valuations. Sees this growing at about 5% EPS, so it is a bit expensive.