As an investment, AT&T still rings true

Meanwhile, AT&T's broadband division should register a smaller, but adequate 2008 revenue increase. Moreover, the company's broadband service appears to have weathered the broadband price wars reasonably well.

In addition, land-line work force reductions and efficiency improvements, have increased that division's operating margins. The Reuters FY 2008/FY 2009 EPS consensus estimates for ATT are $3.16 to $3.54. A $1.60 annual dividend adds to the favorable mix.

The risks? Analysts are keeping an eye on AT&T's ability to integrate recent acquisitions, and on the company's costs related to the introduction of its fiber-based t.v. service.

What should investors not expect from T? Strong growth: T is a well-capitalized, blue-chip, stable, utility play, with an adequate dividend. Hence, assume modest annual stock price appreciation. However, provided T attains analysts' revenue estimates for 2008 and 2009, T's shares will appreciate enough to more than justify an investment, particularly in today's uncertain economic environment.

The First Call mean rating for T is: Buy [29 firms]. Mean 2008 target: $44 [high: $54, low: $35].

Stock Analysis: AT&T is a low-risk stock. Investors with an investment horizon longer than 2 years should be rewarded from T's shares. More-cautious investors may consider waiting for AT&T to pull back to $36, but keep in mind that T's shares may not retreat to that level. Sell/Stop Loss if you were to purchase shares in this company: $28.

Disclosure: Lazzaro has no positions in stocks. In addition to private real estate holdings, he owns corporate and municipal bonds, and cash certificates of deposit.