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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 sector include Facebook Inc. (FB), Comcast Corp. (CMCSA), and AT&T Inc. (T). Communications stocks, as represented by the Communication Services Select Sector SPDR ETF (XLC), have slightly underperformed the broader market with a total return of -14.2% compared to the S&P 500’s total return of -13.5% over the past 12 months. These market performance numbers and the statistics in the tables below are as of March 24.
Here are 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 focused on creating premium content and experiences for audiences across the world. 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. ViacomCBS announced in January that George Cheeks was appointed to succeed Joe Ianniello as President and Chief Executive Officer (CEO) of CBS Entertainment Group, effective March 23, 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. The company announced earlier this month that Neil Chugani has been appointed Chief Financial Officer (CFO) and Head of Strategy and Operations of the company’s Direct-to-Consumer segment.
- Fox Corp.: Fox is a television company that operates cable news channels such as Fox News and Fox Sports. The company also operates a series of broadcast television stations throughout the U.S. Fox announced earlier this month that it has entered into an agreement to acquire Tubi, a free, ad-supported streaming service, for $440 million.
Fastest Growing Communications Stocks
These are the communications stocks with the highest year-over-year (YOY) earnings per share (EPS) growth for the most recent quarter. Rising earnings show that a company’s business is growing and is generating more money that it can reinvest or return to shareholders.
- Fox Corp. (Class A Shares): See company description above.
- Netflix Inc.: Netflix is an Internet subscription services company that offers streaming movies and television shows, and also distributes DVDs by mail. Netflix increasingly is producing entertainment content.
- Verizon Communications Inc.: Verizon is a telecom conglomerate operating cable television, landline, internet, and cellular phone service. The company announced in January that Rathi Murthy was appointed to the role of Chief Technology Officer (CFO).
Communications Stocks with the Most Momentum
These are the communications stocks that had the highest total return over the last 12 months.
|Communications Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Activision Blizzard Inc. (ATVI)||56.47||43.4||21.5|
|Take-Two Interactive Software Inc. (TTWO)||109.82||12.5||14.4|
|Charter Communications Inc. (CHTR)||381.78||89.4||5.8|
|S&P 500 (SPY)||N/A||N/A||-13.5|
|Communication Services Select Sector SPDR ETF (XLC)||N/A||N/A||-14.2|
- Activision Blizzard Inc.: Activision Blizzard publishes, develops, and distributes video games and related products. Some of its popular franchises include Call of Duty, Guitar Hero, and World of Warcraft. The company announced earlier this month that it has appointed former Google executive Daniel Alegre to the roles of President and Chief Operating Officer (COO), effective April 7, 2020.
- Take-Two Interactive Software Inc.: Take-Two Interactive Software develops, produces, and markets interactive software including video games and related accessories. The company creates video games for consoles, handheld systems, personal computers, smart phones, and tablets.
- 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.
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