Looking for top value, growth, and momentum stocks?
Then look no further than the communications sector.
Sure, nothing’s hotter than tech these days but when it comes to long-term investment potential that’s avoided the market’s current frothiness then communications stocks are where it’s at.
There is a broad range of hot well-known companies in this sector that operate in the realm of phones, internet services, broadband, and wireless.
Amongst the top players, you’ll find; Verizon (NYSE: VZ), China Mobile LTD(NYSE: CHL), and AT&T (NYSE: T) as well as known names like Facebook (NASDAQ: FB), Disney (NYSE: DIS) and Comcast (NASDAQ: CMCSA).
After doing some digging, here are our top picks in the sector:
Value Stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio are ViacomCBS Inc.(NASDAQ: VIAC) 6.6 P/E, which is an international premium content and distribution provider, and more.
CenturyLink Inc(NYSE: CTL) 9.7 P/E provides communications services which include but are not limited to local and long-distance voice, broadband, data integration, hosting, and ethernet and Discovery Inc.(NASDAQ: DISCK) 10.3 P/E, is global media giant providing services across a number of platforms including, pay per view, free to air, broadcast TV, digital distribution and content licensing.
The fastest-growing stocks in the communications sector based on year over year earnings per share growth are Netflix Inc.(NASDAQ: NFLX), with earnings per share growth of 165%. This is a subscription-based service offering streaming movies, TV shows, production of their own content, and videos by mail.
Charter Communications Inc.(NASDAQ: CHTR) earning per share in the last year grew 161%. This cable communications behemoth provides cable broadcasting, internet, voice, and a variety of other business services to customers across the U.S.
Social medias sweetheart Facebook(NASDAQ: FB) saw a 97.8% bounce in earnings per share year over year. Its business spans messaging services, an online marketplace, photo, information, and video sharing.
The communications stocks showing the greatest momentum based on the highest total return over the last 12 months are Activision Blizzard Inc.(NASDAQ: ATVI) showing a 12-Month Trailing Total Return of 73.2%. The video game giant develops and distributes video and related products. Popular games include Call of Duty, Guitar Hero, and World of Warcraft.
Netflix and Charter as described above showed a return of 66.5% and 56.4 % respectively.
Your Bottom Line
User activity in the streaming and entertainment service has increased sharply due to the coronavirus, as well as plunging advertising at Viacom and Discovery. The Communication Services Select Sector SPDR ETF (NYSE: XLC), has bested the broader market though, with a total return of 24.9% compared to the S&P 500’s total return of 19.1% over the past year. As always we urge you to do your due diligence before investing.