Forgotten bellwether offers 5.5% dividend yield

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In a report published Wednesday, Jefferies added shares of AT&T to its so-called Franchise Pick List because of the telecom company's 5.5 percent dividend yield that the analyst says is safe.

"We believe investors will be rewarded for investment in AT&T shares," wrote Jefferies' analyst Mike McCormack, who predicts the stock could reach $40 by the end of the year, a 16 percent move from where it trades.