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AT&T TYield: 5.1%

As a $190 billion megacap, AT&T (T) isn’t going anywhere. It shares a near-duopoly on the wireless market with Verizon (VZ), and as long as people need Internet access and cell phones, this telecom will do just fine.

Recently, AT&T announced plans to expand its 4G LTE service to cover 200 million customers — with plans to cover 300 million by the end of 2014.

The downside, of course, is that the law of large numbers means AT&T can’t realistically grow its business at a rapid pace — so shares will never go crazy with a 50% annual gain. But if you’re looking for stability and dividends, then look no further than this entrenched company with a wide moat in a capital-intensive sector.

So far in 2013, the stock has been sluggish thanks in part to Highfields Capital Management’s founder and CEO, Jonathon Jacobson, publicly coming out as being short AT&T at the Ira Sohn conference in May. But the details were pretty thin, and the stock has held firm during the past several weeks barring a brief dip and recovery with the broader market in late June.

With AT&T boasting a 5.1% dividend yield and with low expectations priced in, now could be a decent time to stake out a position in this telecom giant. The forward P/E of AT&T is about 13, so shares seem fairly valued.

Article printed from InvestorPlace Media,

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