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Communications companies include any services related to land-line, fiber optic, wireless, cable or cellular communication. Companies within this sector also may be major creators and producers of movies, television shows and other content. This sector includes major companies like Verizon Communications Inc. (VZ), Comcast Corp. (CMCSA), and AT&T Inc. (T). As represented by the Communications Services Select Sector SPDR ETF (XLC), the sector has slightly underperformed the S&P 500 index over the past 12 months, gaining 25.9% compared with S&P gains of 27.3%. All figures are as of January 6, 2020.
Below, we’ll take a closer look at the top 3 communications stocks with the best value, the fastest earnings growth, and the most momentum.
Best Value Communications Stocks
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
- ViacomCBS Inc.: ViacomCBS is a global multimedia company that operates businesses spanning the media and entertainment industries. The company provides cable networks, content production and distribution, television stations, digital streaming services. It operates other internet-based businesses as well as consumer publishing. ViacomCBS is the result of a merger that was finalized last month between Viacom and CBS, and the combined company recently announced that it entered into a definitive agreement with beIN Media Group to acquire a 49% stake in global film and television studio MIRAMAX. The transaction is expected to close in the first quarter of 2020.
- Discovery Inc.: Discovery is a global media company providing content across a number of distribution platforms, including pay-television, free-to-air and broadcast television, and digital distribution and content licensing arrangements.
- Electronic Arts Inc.: Electronic Arts is best known as a video game company. The company develops, publishes, and markets video game software for consoles, personal computers and mobile devices. Electronic Arts posted year-over-year (YOY) revenue growth of 4.8% for Q2 of fiscal year 2020, the three-month period ending September 30, 2019. Earnings per share (EPS) was up 248.2% YOY; however, without a one-time tax benefit, EPS would have fallen 6.0% YOY.
Fastest Growing Communications Stocks
These are the communications stocks with the highest YOY EPS growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
|Fastest Growing Communications Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)|
|Electronic Arts Inc. (EA)||108.95||31.8||248.2|
|Take-Two Interactive Software Inc. (TTWO)||124.55||14.1||186.4|
|Discovery Inc. (DISCK)||29.93||15.7||118.8|
- Electronic Arts Inc.: See company description above.
- Take-Two Interactive Software Inc.: Take-Two Interactive Software develops, produces, and markets interactive software including video games and related accessories. This business creates video games for consoles, handheld systems, and personal computers.
- Discovery Inc.: See company description above.
Communications Stocks with the Most Momentum
These are the communications stocks that had the highest percentage price change over the last 12 months.
|Communications Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Price Change (%)|
|Charter Communications Inc. (CHTR)||496.63||106.7||64.9|
|Facebook Inc. (FB)||211.38||603.0||53.2|
|Live Nation Entertainment Inc. (LYV)||71.35||15.2||40.0|
|S&P 500 (SPY)||N/A||N/A||26.9|
|Communications Services Select Sector SPDR ETC (XLC)||N/A||N/A||25.6|
- Charter Communications Inc.: Charter Communications is a cable operator and broadband communications services company providing video, Internet and voice services to residential, and business customers. The company also sells video and online advertising, fiber-delivered communications, and information technology solutions to large enterprise customers. Additionally, Charter owns and operates regional sports networks and local sports, news, and community channels.
- Facebook Inc.: Facebook as a business is synonymous with the company’s namesake social networking platform. This service allows individuals to communicate with other users through sharing of information, photographs, videos, messages, and more. Facebook reported robust revenue and earnings growth for Q3 2019. Revenue rose 29% YOY during Q3 while EPS rose 20% YOY.
- Live Nation Entertainment Inc.: Live Nation is an entertainment company that produces live concerts and sells tickets to those events. The company also offers ticketing services for arenas, stadiums, professional sports franchises and leagues, college sports teams, museums, and theaters. Live Nation announced in late October that it had acquired a majority stake in David Grutman’s Groot Hospitality, a portfolio that includes top dining, entertainment and hospitality brands.
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