Communication stocks completed another strong up week last week with both AT&T (T) and Verzion (VZ) rallying strong. As the world continues to fret over the problems in Europe, the perceived safety of the large dividends of these two stocks has attractive many buyers.
Even with these large moves of the last 3 months (see Figure 1), both stocks still pay dividends that exceed 4.5%. Naturally this level appears very attractive to most investors with the 10 Yr Treasury remaining around 1.6%. Why not jump at these yields?