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By Lu Wang and Rita Nazareth March 16 (Bloomberg) — Telephone companies in the U.S. including AT&T Inc. have posted the worst returns during the yearlong rally in the Standard & Poor’s 500 Index, and their shares are expensive considering their growth prospects. The top panel on the CHART OF THE DAY shows phone shares have risen 21 percent since March 9, 2009, the smallest advance among 10 industries in the S&P 500. The bottom panel shows the group’s PEG ratio, calculated by dividing its price-to-earnings multiple by forecast profit growth, is the highest at 2.8, according to data compiled by Leuthold Group LLC. The high valuation suggests AT&T and Verizon Communications Inc., the biggest U.S. telephone companies, may keep lagging behind, said Keith Wirtz , who oversees $18 billion as chief investment officer at Fifth Third Asset Management Inc. in Cincinnati. The group is the only one among 10 where analysts don’t foresee profit growth this year, according to average estimates compiled by Bloomberg. “These are going to be slow growers for a while because of the level of competition,” said Wirtz, whose firm is underweight phone stocks, meaning it owns less than their representation in benchmark stock indexes. “They may be pricey if you put on a three-to-five-year perspective.” The combined PEG ratio for the nine phone companies in the S&P 500 is twice the figure for the entire index, data from Minneapolis-based Leuthold show. To contact the reporters on this story: Lu Wang in New York at lwang8@bloomberg.net ; Rita Nazareth in New York at rnazareth@bloomberg.net .