Blue chip equities are often priced for perfection. Indeed, most income investors automatically commit their investment funds to blue chip stocks. This can be a mistake since in some cases, blue chip equities offer lower dividend yields than those available via same company debt issues. We examine a few debt offerings that permit income investors to earn comparable yields with blue chip bonds and preferred shares. AT&T (T) Background AT&T is currently a holding company. AT&T has four core business segments: wireless, wireline, AT&T U- Verse TV, and advertising solutions. Current Dividend As the chart below indicates (click to enlarge), AT&T's dividend has been growing less than 5% per year. This lack of dividend growth does not bode well for investors who seek a growing income stream. AT&T pays a 57-cent quarterly dividend. This equates to a 5.6% annual dividend yield. The yield does not warrant purchasing this equity. The company is burdened with a heavy debt load. Investors should seek income from AT&T debt offerings or preferred shares. I recommend purchasing an AT&T instrument which will provide a similar rate of return to the AT&T common dividend. For example, the AT&T Inc., 6.375% Senior Notes due 2/15/2056, cusip: 00211G208, offers a coupon rate 6.38% yield on a $25 share price. T currently trades at $26.68, and offers a 5.9% yield. There is always, if legally stated, risk of a callable bond or preferred share being called in early by the company. A bond or preferred share typically offers more safety than a common equity. Stock Valuation AT&T has a 35% long-term debt load. This is a significant debt load in the world of changing communication. AT&T is adept, however, at changing their key business model. Witness the recent T- Mobile USA (DTEGF.PK) proposed purchase for $39- billion in stock and cash. The stock trades at a 2011 price-to-earnings (P/E) multiple of 13. The stock is trading at $31.11 and is expected to have earnings-per-share (EPS) of $2.35 in 2011. The stock's P/E multiple is greater than the expected increase in AT&T's revenue and income.