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2021 Communication Services Stocks List | The 5 Best Now

Sure_Dividend 
0 0 14.12.21
2021 Communication Services Stocks List | The 5 Best Now
 

Spreadsheet data updated daily

Top 5 List Updated on December 14th, 2021

The communication services sector has a lot to offer investors, particularly those looking for higher investment income.

Many communication services stocks generate strong profits and cash flow, which allow them to pay high dividend yields to shareholders.

And, the major communication services stocks broadly have lower valuations than many other market sectors, making them appealing for value investors as well.

With this in mind, we created a list of communication services stocks.

You can download the list (along with important financial ratios such as dividend yields and payout ratios) by clicking on the link below:

 

Click here to download my Communication Services Excel Spreadsheet now. Keep reading this article to learn more.

Keep reading this article to learn more about the benefits of investing in communication services stocks.

Table Of Contents

The following table of contents provides for easy navigation:

How To Use The Communication Services Stocks List To Find Investment Ideas

Having an Excel database of all communication services stocks, combined with important investing metrics and ratios, is very useful.

This tool becomes even more powerful when combined with knowledge of how to use Microsoft Excel to find the best investment opportunities.

With that in mind, this section will provide a quick explanation of how you can instantly search for stocks with particular characteristics, using two screens as an example.

The first screen that we will implement is for stocks with price-to-earnings ratios below 15.

Screen 1: Low P/E Ratios

Step 1: Download the Communication Services Stocks Excel Spreadsheet List at the link above.

Step 2: Click the filter icon at the top of the price-to-earnings ratio column, as shown below.

Step 3: Change the filter field to ‘Less Than’, and input ’15’ into the field beside it.

The remaining list of stocks contains stocks with price-to-earnings ratios less than 15.

The next section demonstrates how to screen for stocks with high dividend yields.

Screen 2: Communication Services Stocks With High Dividend Yields

Stocks are often categorized based on their dividend yields. This is the percentage of an investment that an investor will receive in dividend income.

We define high dividend yields as stocks with yields of 5% or more.

Screening for stocks with high dividend yields could provide interesting investment opportunities for more risk-averse, income-oriented investors.

Here’s how to use the Communication Services Stocks Excel Spreadsheet List to find such investment opportunities.

Step 1: Download the Communication Services Stocks Excel Spreadsheet List at the link above.

Step 2: Click on the filter icon for the ‘dividend yield’ column, as shown below.

Step 3: Change the filter setting to ‘Greater Than’ and input 0.03 into the column beside it. Note that 0.03 is equivalent to 3%.

The remaining stocks in this list are those with dividend yields above 3%. This narrowed investment universe is suitable for investors looking for low-risk, high-yield securities.

You now have a solid fundamental understanding of how to use the spreadsheet to its fullest potential. The remainder of this article will discuss the top 5 communication services stocks now.

The Top 5 Communication Services Stocks Now

The following section discusses our top 5 communication services stocks today, based on their expected annual returns over the next five years.

The rankings in this article are derived from our expected total return estimates from the Sure Analysis Research Database.

The 5 stocks with the highest projected five-year total returns are ranked in this article, from lowest to highest.

Related: Watch the video below to learn how to calculate expected total return for any stock.

 

Rankings are compiled based upon the combination of current dividend yield, expected change in valuation, as well as expected annual earnings-per-share growth.

This determines which communication services stocks offer the best total return potential for shareholders.

#5: Omnicom (OMC)

  • 5-year expected annual returns: 11.4%

Omnicom is a holding company for advertising agencies. The company offers marketing and corporate communication services.

Some of its core services include media planning, digital & interactive marketing, sports & event marketing, brand consulting, public relations, and customer relations management.

Omnicom reported its third quarter earnings results on October 19. You can see highlights of the quarterly performance in the image below:

Source: Investor Presentation

We expect annual returns of 11.4% per year, due to 4% EPS growth, the 3.9% dividend yield, and a ~3.5% annual return from a rising P/E multiple.

Click here to download our most recent Sure Analysis report on Omnicom (preview of page 1 of 3 shown below):


#4: The Interpublic Group of Companies (IPG)

  • 5-year expected annual returns: 11.7%

The Interpublic Group of Companies, Inc. provides advertising and marketing services worldwide. Its operations are well–diversified amongst consumer advertising, digital marketing, communications planning, media buying, and data management services. It generates more than $8.0 billion in annual revenues.

On October 21st, 2021, Interpublic reported its Q3–2021 for the quarter ending September 30th, 2021. For the quarter, revenues increased 15.7% to $2.26 billion, 15% of which was organic. Revenue growth reflected both a rebound from the impact of the pandemic as well as strength on Interpublic’s evolving offerings.

We expect annual returns of 11.7% per year for IPG stock over the next five years. Returns will be driven by 7% annual EPS growth, the 2.9% dividend yield, and a ~1.8% annual boost from an expanding P/E multiple.

Click here to download our most recent Sure Analysis report on IPG (preview of page 1 of 3 shown below):

#3: Verizon Communications (VZ)

  • 5-year expected annual returns: 14.5%

Verizon Communications was created by a merger between Bell Atlantic Corp and GTE Corp in June 2000. Verizon is one of the largest wireless carriers in the country.

Wireless contributes three–quarters of all revenues, and broadband and cable services account for about a quarter of sales. The company’s network covers ~300 million people and 98% of the U.S.

Verizon has now launched 5G Ultra–Wideband in several cities as it continues its rollout of 5G service. Customers in parts of Atlanta, Dallas, Detroit, Indianapolis, Omaha and Washington, D.C. were able to access the company’s 5G network.

Verizon stock trades for a 2021 P/E ratio below 10, compared with our fair value estimate of 13. Shareholder returns are expected to be boosted by a rising valuation multiple, expected EPS growth of 4%, and the high dividend yield of 5.1%.

Overall, total returns are expected to reach 14.5% per year over the next five years.

Click here to download our most recent Sure Analysis report on Verizon (preview of page 1 of 3 shown below):

#2: Comcast Corporation (CMCSA)

  • 5-year expected annual return: 16.0%

Comcast is a media, entertainment and communications company. Its business units include Cable Communications (High–Speed Internet, Video, Business Services, Voice, Advertising, Wireless), NBCUniversal (Cable Networks, Theme Parks, Broadcast TV, Filmed Entertainment), and Sky, a leading entertainment company in Europe.

Comcast reported its Q3 2021 results on 10/28/21. For the quarter, the company’s revenues climbed 18.7% to $30.3 billion, adjusted EBITDA rose 18.1% to almost $9.0 billion, adjusted earnings–per–share (EPS) climbed 33.8% to $0.87, and free cash flow (FCF) of $3.2 billion.

Overall, total returns are expected to reach 16% per year over the next five years.

Click here to download our most recent Sure Analysis report on Comcast (preview of page 1 of 3 shown below):

#1: AT&T Inc. (T)

  • 5-year expected annual returns: 16.7%

AT&T is a telecommunications giant, as its core Communications segment provides mobile, broadband and video to 100 million U.S. consumers and 3 million businesses.

On October 21st, 2021, AT&T reported Q3 2021 results for the period ending September 30th, 2021. For the quarter the company generated $39.9 billion in revenue, down –5.7% from $42.3 billion in Q3 2020, reflecting the separation of the U.S. video business, other divested businesses and lower Business Wireline revenues.

On an adjusted basis, earnings–per–share equaled $0.87 compared to $0.76 in the year ago quarter. AT&T’s net debt–to–EBITDA ratio was 3.17x.

Source: Investor Presentation

AT&T is optimistic about generating reasonable growth and the payout ratio had been falling, resulting in excess funds to divert toward paying down debt.

AT&T also has a long history of increasing dividends each year (AT&T is currently a Dividend Aristocrat).

With a P/E below 10, AT&T is undervalued against our fair value estimate of 11. The combination of an expanding P/E multiple, 3% expected EPS growth and the 9.3% dividend yield lead to total expected returns of 16.7% per year over the next five years.

Click here to download our most recent Sure Analysis report on AT&T (preview of page 1 of 3 shown below):

Final Thoughts

The communication services sector is attractive for long-term investment. Demand for various communication services such as Internet and wireless remains high, and is not likely to slow down any time soon.

The sector is also appealing for income investors, due to the high-yielding telecom giants such as AT&T and Verizon.

If you’re willing to explore ideas outside of the communication services sector, the following databases contain some of the most high-quality dividend stocks around:

  • The Dividend Aristocrats: dividend stocks with 25+ years of consecutive dividend increases.
  • The Dividend Achievers: dividend stocks with 10+ years of consecutive dividend increases.
  • The Dividend Kings: Considered the best-of-the-best when it comes to dividend history, the Dividend Kings are an elite group of dividend stocks with 50+ years of consecutive dividend increases.
  • The Blue Chip Stocks List: dividend stocks that are on the Dividend Achievers, Dividend Aristocrats, and/or Dividend Kings list.

If you’re looking for other sector-specific stocks, the following Sure Dividend databases will be useful:


Source suredividend

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