AT&T

T-N

AT&T vs. BCE. Two issues are currency and market size. Likes BCE's balance sheet better, but worries about ability to withstand competition if Canada ever deregulates telcos. AT&T has a lot of debt, and he worries about ability to pay it down and still pay the dividend. AT&T lives in a deregulated market. They're trying to pivot and be a data provider at a time when government's saying you can't sell data. The content war is big and rough. Would avoid the space.

Numbers last quarter weren't the greatest. Lots of debt. Media and telco space in US has a lot going on, very competitive. Trying to find a way to monetize the distribution. Prefers BCE, which operates in the much safer business environment in Canada, and has a good dividend of 5%.

He views this differently in the space, due to its high level of debt. They have made big bets on acquisitions. They have $170 billion in debt -- at some point this will bring risk. Its high dividend is also at risk to a future cut, he feels.

Sell BCE to buy AT&T? Stick with BCE. AT&T's strategy to buy HBO is suspect and their balance sheet is suspect. Plus, you don't keep all the dividends (because it's American). Currency moves are also a worry.

US telcos are having a tough time. Lot more pricing competition. Battling to get into video. Increasing debt over the years, can't get growth, questionable acquisitions. He's stayed away. No dividend growth from here.

Question on international telcos - he thinks that the international telcos are into the heavy dividend style investment. Vodafone is in Europe. The US is lower risk. Dividends are going to stable or up with this one and Verizon Communications (VZ-N) as well.

Looks a little bit like a value trap. A competitive business. Subscriber growth is flattening out. The company keeps on adding debt every year. There is not a lot of dividend coverage. Not a fan of the sector. (Analysts’ price target is $34.35)