Big telecom companies like AT&T (NYSE:T) and Verizon (NYSE:VZ) are viewed as high yield utilities and strong bond alternatives, and for good reason.

After all, these are subscription-based businesses generating gobs of recurring revenue and securing yields north of 5%, compared to a 10-year Treasury yield of just north of 2%. In addition, both have very low volatility and make for solid core holdings for conservative retiree portfolios.

However, the current valuations of these two companies make no darn sense at all. That’s because for similar companies such as these, a premium price, i.e., lower yield, generally signals a qualitative superiority – which, in the case of income investing, is generally one of two things: stronger long-term growth and/or a more secure dividend.

However, as we’ll now see, Verizon is the objectively far inferior company, yet it somehow trades at a premium. This is absolutely……READ MORE

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