In an article about bonds in this week's Barron's, Andrew Bary makes the interesting argument that convertible bonds from General Motors (NYSE: GM) and Ford (NYSE: F) are currently more attractive than their common stocks.

Any investor in the automotive sector has to be concerned about the possibility of bankruptcy. The American auto manufacturers are flirting with such severe losses that they may not be able to recover. The nice thing about bonds is that they give you added security in case bankruptcy does occur. As creditors, bond holders get their money (or at least part of their money) back before stock holders, who are typically left with nothing.

GM has issued a number of convertible bonds, including one which trades under the ticker GPM in the $17 range. It can be redeemed for stock in 2018 at 25, which results in a 11.9% yield. Bary points out that if GM stock doubles from its current $20 price, the convert could pay 50%.