One can sense the level of uncertainty in the market when a man who made his first fortune by winning at blackjack asks for a safe deposit. Bill Gross, the billionaire founder of Pacific Investment Management Company (PIMCO), and an active trader in the bond mainstream, has “stayed away” from the AI names that have defined market returns in recent years.
Sounding cautious about the AI business, Gross said, “Maybe it’s not an endgame but it feels like it. I stay away.” Instead, the “Bond King” finds value in names that have a long track record of capturing multiple market cycles, run stable businesses, and have a history of paying dividends.
What income stocks are they? Let’s take a closer look.
Founded in 2000, Verizon ( VZ ) is one of the largest telecommunications companies in the world. It provides a wide range of communications and technology services to consumers, businesses, and government agencies in the United States and internationally. Its core operations include wireless and fixed wireline voice and data services, broadband and fiber optic broadband, wireless equipment and related devices, and business solutions such as IoT connectivity, managed networks, and security services.
With a market capitalization of $211 billion, VZ stock is up 22% on a year-to-date (YTD) basis. The stock offers a dividend yield of 5.5%, which is much higher than the sector average of 1.55%. Notably, the company is well on its way to becoming a “dividend aristocrat,” having raised dividends consistently over the past 21 years.
www.barchart.com
Last quarter’s results saw Verizon report losses on both revenue and earnings. Revenue for the quarter was $36.4 billion, up 2% from last year. However, earnings fell slightly to $1.09 per share from $1.10 in the year-ago period.
Still, the company continues to generate healthy cash flow from operations as net cash from operating activities for 2025 reaches $37.1 billion, up from $36.9 billion last year. Overall, Verizon closed 2025 with a cash balance of about $19 billion.
Meanwhile, VZ stock’s forward price-to-earnings (P/E) ratio and price-to-cash flow (P/CF) ratio trade at 10.1 times and 5.5 times, respectively, lower than the sector median of 13.8 times and 8.1 times.
Overall, analysts rate VZ stock as a consensus “moderate buy”. An average target price of $49.72 is consistent with current levels, while a high target price of $71 indicates a potential upside of 43%. Of the 29 analysts covering the stock, eight have a “strong-buy” rating, three have a “moderate-buy” rating, and 18 have a “hold” rating.
www.barchart.com
The second name on the list is Verizon’s rival, AT&T ( T ). Originally founded in 1885, AT&T operates as a large integrated telecommunications and technology company that provides wireless and wireline communications services, broadband Internet, video services, network management services, and advertising and media interfaces.
The company’s market cap currently stands at $196 billion, with T stock offering a dividend yield of 3.96%, which is higher than the sector median. Overall, T stock is up 13% on a YTD basis.
www.barchart.com
Notably, the company’s latest results for Q4 showed defeats on both the top and bottom lines. While revenue rose nearly 4% year-over-year to $33.5 billion, earnings rose 21% to $0.52 per share over the same period. Notably, this marked another quarter that saw a break in revenue from the company.
Although cash flow from operating activities saw a slight decline on a YOY basis, it remained strong at $11.3 billion. Overall, the company ended the quarter with a cash balance of $18.2 billion, bringing its short-term debt level to about $9 billion.
On a value basis, T stock is undervalued. Its forward P/E and P/CF ratios of 12.1 and 5.4, respectively, are below the sector median.
Analysts have an overall rating of “moderate buy” for the stock, with an average target price of $29.63 indicating a potential upside of about 6% from current levels. Of the 28 analysts covering the stock, 15 have a “Strong Buy” rating, three have a “Strong Buy” rating, nine have a “Hold” rating, and one has a “Strong Sell” rating.
www.barchart.com
Western Midstream Partners (WES) is an energy infrastructure company founded in 2007. Its core business is the middle part of the oil and gas value chain, including gathering, compressing, treating and transporting natural gas, crude oil and natural gas liquids (NGLs), as well as gas processing and water processing for lifting water. It owns and operates an extensive pipeline network, processing facilities, and storage systems in Texas, New Mexico, and the Rocky Mountain region.
With a market value of $16.4 billion, WES stock is up 6% on a YTD basis. The stock offers a healthy dividend yield of 8.75%, which is high even for energy companies that are generally very generous with their dividend payouts.
www.barchart.com
That said, West Midstream’s last quarter results were poor, with revenue and earnings missing estimates. Total revenue for the quarter came in at just over $1 billion, up 11% on a YOY basis. However, earnings per share fell to just $0.47 from $0.85 per share last year as operating expenses rose 41% to $744.2 million over the same period.
Net cash from operating activities rose to $2.22 billion in 2025 from $2.14 billion in 2024, as the company closed the quarter with a cash balance of $819.5 million, down from current liabilities of $1.24 billion.
Values also send mixed signals. While the forward P/E multiple of 12.2 times is below the sector median of 16, the P/CF ratio of 8.9 is higher than the sector median of 6.5.
Analysts rated WES stock as a consensus “Hold”, with an average target price of $42 based on current levels. Of the 13 analysts covering the stock, two have a “strong-buy” rating, one has a “moderate-buy” rating, eight have a “hold” rating, and two have a “neutral sell” rating.
www.barchart.com
As of the date of publication, Pathikrit Bose did not have any positions (either directly or indirectly) in any of the securities mentioned in this article. All information and data in this article is for informational purposes only. This article was originally published on Barchart.com
