AT&T is trading at its lowest valuations in 20 years. It’s an anti-bubble stock that could double in the next five years even with modest 1.7% annual growth.
However, this high-yield competitor is 7% undervalued and expected to grow twice as fast over time, delivering historical far better long-term returns.
This future dividend aristocrat is the far superior choice for conservative income investors looking for a very safe 4.7% yield (4.1% for AT&T post cut), low volatility, and a recession-resistant business model.
On any measure of quality and safety, this high-yield blue-chip is the smarter choice for retirees, and one of the most reasonable and prudent high-yield defensive blue-chips retirees can buy today.
AT&T’s anti-bubble return potential makes it a potentially good though speculative 5 to 10-year trade that should be sold when it eventually becomes overvalued and the proceeds put into higher quality and faster-growing high-yield blue-chips.