Top Communications Stocks for October 2021

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The communications sector is comprised of a broad range of companies that sell phone and Internet services via traditional landline, broadband, or wireless. The sector also includes companies that are major creators and producers of movies, television shows, and other content. Well-known companies in the communications sector include Facebook Inc. (FB), Comcast Corp. (CMCSA), and T-Mobile U.S. Inc. (TMUS).

Communications stocks, represented by the Communication Services Select Sector SPDR ETF (XLC), have outperformed the broader market. XLC has provided a total return of 41.2% over the past 12 months, above the Russell 1000’s total return of 35.2%. These market performance figures and all statistics in the tables below are as of Sept. 17, 2021.

Here are the top three communications stocks with the best value, the fastest growth, and the most momentum.

These are the communications stocks with the lowest 12-month trailing price-to-earnings (P/E) ratio. Because profits can be returned to shareholders in the form of dividends and buybacks, a low P/E ratio shows you’re paying less for each dollar of profit generated.

Best Value Communications Stocks
  Price ($) Market Cap ($B) 12-Month Trailing P/E Ratio
Nexstar Media Group Inc. (NXST) 148.41 6.2 7.1
ViacomCBS Inc. (VIAC) 39.99 25.9 7.5
Fox Corp. (FOX) 35.10 20.2 9.8

Source: YCharts

  • Nexstar Media Group Inc.: Nexstar Media Group is a television broadcast and digital media company. It is focused on the acquisition, development, and operation of television stations, interactive community websites, and digital media services in medium-sized markets throughout the U.S. On Sept. 15, the company announced that its subsidiary, Nexstar Digital, had launched STELLAR, a data-driven platform. The new platform provides advertisers the ability to seamlessly purchase advertising across nearly 200 television stations and hundreds of local news and weather apps and websites.
  • ViacomCBS Inc.: ViacomCBS is a global multimedia company focused on creating premium content and experiences for audiences across the globe. The company provides cable networks, content production and distribution, television stations, and digital streaming services. It also operates other Internet-based businesses as well as consumer publishing.
  • Fox Corp.: Fox is an entertainment company that produces and licenses news, sports, and entertainment content. The company’s content is distributed by telecommunications companies and online distributors and via cable television, direct broadcast satellite, and similar offerings. The company also manages studios, theaters, editing bays, and other production facilities. On Sept. 13, the company announced that Fox Entertainment had acquired the entertainment platform TMZ and all its media properties from WarnerMedia. As part of the deal, Fox Entertainment is acquiring TMZ’s linear, digital and experiential assets and syndicated programs such as TMZ LIVE and TMZ Sports. Terms of the acquisition were not disclosed in the press release.

These are the top communications stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly year-over-year (YOY) percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore, ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.

Fastest-Growing Communications Stocks
  Price ($) Market Cap ($B) EPS Growth (%) Revenue Growth (%)
T-Mobile US Inc. (TMUS) 128.00 159.7 766.7 12.9
Alphabet Inc. (GOOGL) 2,816.00 1,878 169.1 61.6
Facebook Inc. (FB) 364.72 1,028 100.6 55.6

Source: YCharts

  • T-Mobile US Inc.: T-Mobile is a leading telecommunications services company and national wireless carrier. The company offers business, consumer, and prepaid options as well as data plans. In mid-September, T-Mobile announced that it would launch its T-Mobile and Metro by T-Mobile product offerings at 2,300 t Walmart Inc. (WMT) locations and on Walmart’s website as of Oct. 18.
  • Alphabet Inc.: Alphabet is a holding company and the parent company of Google. Through subsidiaries, the company provides web-based search, maps, software, mobile operating systems, advertisements, consumer content, and more. Note that this listing refers to the company’s Class A shares.
  • Facebook Inc.: Facebook operates the world’s largest social networking website, which facilities the sharing of information, photos, videos, and website links. The Wall Street Journal reported in September that Facebook’s internal studies determined that the company’s Instagram site had a “toxic” effect on teenage girls. Instagram often shows influencers who have “perfect” lives and bodies, the WSJ said. In the article, teen girls blamed Instagram “for increases in the rate of anxiety and depression.” In a March 2021 Congressional hearing, Facebook CEO Mark Zuckerberg said that research suggested “using social apps to connect with other people can have positive mental-health benefits.”

These are the communications stocks that had the highest total return over the past 12 months.

Communications Stocks With the Most Momentum
  Price ($) Market Cap ($B) 12-Month Trailing Total Return (%)
The Interpublic Group of Companies Inc. (IPG) 36.99 14.6 109.8
Roku Inc. (ROKU) 324.10 43.3 96.8
Alphabet Inc. (GOOGL) 2,816.00 1,878 89.4
Russell 1000 N/A N/A 35.2
Communication Services Select Sector SPDR ETF (XLC) N/A N/A 41.2

Source: YCharts

  • The Interpublic Group of Companies Inc.: The Interpublic Group of Companies is a group of advertising and marketing service companies. It specializes in consumer advertising, digital marketing, communications planning and media buying, public relations, data management, and more.
  • Roku Inc.: Roku offers a TV streaming platform and streaming devices. The platform acts as a TV streaming ecosystem enabling consumers to seamlessly view thousands of channels on a wide range of streaming services and enables content providers and advertisers to reach consumer audiences in markets around the globe. On Sept. 5, 2021, Roku announced that its streaming players will be available later this year in Germany, a fast-growing streaming entertainment market. The Roku devices will offer channels from a wide variety of global, European, and German media companies.
  • Alphabet Inc.: See company description above.

The comments, opinions, and analyses expressed herein are for informational purposes only and should not be considered individual investment advice or recommendations to invest in any security or to adopt any investment strategy. Though we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described in our content may not be suitable for all investors. Because market and economic conditions are subject to rapid change, all comments, opinions, and analyses contained within our content are rendered as of the date of the posting and may change without notice. The material is not intended as a complete analysis of every material fact regarding any country, region, market, industry, investment, or strategy.

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