Best Stocks on the Communication Sector: Forecasts and Returns

Are you looking for companies that operate in the telecommunications sector that can provide you with valid and solid securities on which to think about making an investment?

In this article we will see together what are the best shares on the communication sectorreviewing a list of the best companies operating in the telecommunications sector.

This industry includes, among others, telephone companies, Internet service providers, and satellite and wireless companies. In fact, they offer telephone services, but also internet and television, with the relative infrastructures to support them.

Companies operating in this sector are sought after by investors as they own recurring revenue, so they have a fairly predictable income, and are also not very volatile.

An investor who is looking for dividend income may therefore be interested in such a company.

You just have to continue reading to find out which are the best companies and to know mine opinions on the convenience of this investment.

Enjoy the reading!

Best shares on the communications sector

Now let’s see which companies deserve our attention, but first I suggest you fill out the quiz to understand which investor you are and learn how to choose your investments.

Comcast

It is the largest provider of internet and pay-TV services in the United States. Despite buying the majority of the international media group in 2011 NBCUniversal (one of the five majors of Hollywood) its main revenues derive from the cable communication activity, i.e. from its core business.

Also, together with Disney e Warner Media it is one of media company largest in the world.

The company is based in Pennsylvania and was founded in 1963.

As we said before i higher revenues come from the business and Internet customers, which are increasing every year. This allows the company to compensate for losses arising from video subscribers.

The company has operated over time several acquisitionsas for example in 1995 which acquired a cable operator, EW Scripps Company for 1.5 billion dollars: in this way its customers have become approximately 4.3 million.

It was in the 2000s that it began to diversificationentering the cable television and digital telephony business (with the acquisition of the NDCUniversal group in 2011) and also in the sports sector (the company owns the Philadelphia Flyers, a team that plays in the NHL championship and many sports arenas) .

Furthermore, in 2017 Comcast began to start negotiations for the acquisition of Sky, the company founded by Rupert Murdoch, leader in pay-TV in Italy, the United Kingdom, Germany and other European countries. In September 2018 the operation was successful and with an offer of 30.6 billion pounds Comcast was awarded the Sky company.

One of its shares currently costs 37 dollars and the graphic shows us how the company has gained +5.96% since the beginning of the year.

Netflix

We can not fail to mention Netflix. It is a US company that operates in the internet distribution of television content such as movies and TV series and other paid entertainment content.

It was founded in 1997 in Scotts Valley California. It began as a DVD rental business, and in 2013 entered the production sector by presenting its first series, House of Cards. From that moment it began the production of films and TV series, also offering a lot of “Netflix original” content.

It is therefore a company well positioned on the market and which is still a leader; the threats come mainly from competitorsAmazon Prime above all and Hulu Plus.

As for the strategic partnershipswe can mention the one with Disney, which took place in 2016 to obtain the exclusive broadcasting rights of the most recent Disney-branded films and series and the one with Altice and SFR to cover the market segment of France and Portugal using SFR’s cable channels .

The price of Netflix shares has had an impressive increase, and today it stands at 218 euros.

The graph shows us how there have been two uptrends: one in 2010 until 2011, and the other that started in September 2012 and seems to continue today.

The company has performed well during the pandemic, peaking in November 2020, when its shares cost €604.

The stock then fell sharply, and Netflix lost a large number of subscribers for the first time.

Overall, however, it is one solid company which promises high returns, even if it is currently facing challenges challenges. At the moment, one share costs around 304 euros.

Here you can learn more.

Vodafone

It is one of the main ones telecommunications providers in Europe. It is based in London and was founded in 1984.

It has interests in 25 countries and its main markets are Italy, Germany, Spain and the United Kingdom.

Vodafone has accomplished some acquisitions over the years that have allowed it to establish itself: in 2007, for example, it acquired Tele2 Italia and Tele2 Spain for the sum of 775 million euros.

In 2017 Vodafone Indiathe Indian subsidiary, announced its merger with rival Idea Culler, and went on to create annual revenues exceeding 25 billion euros, making it the largest mobile operator in the Indian market.

His market capitalization is 24.24 billion pounds, and has a dividend yield shade8,61%.

And’Vodafone action cost about 89 pence.

Il graphic shows us a peak right away in July 2021, and then a recovery, with forecasts predicting an increase in cash flow in the coming years.

In fact, since the beginning of the year the company has recorded a +4.74%.

Telefonica

We are facing one Spanish telecommunications company, which operates mainly in Spain and Latin America. It is also one of the largest fixed and mobile telecommunications companies, and was founded in 1924 in Madrid.

A very important transaction supported by the company was to sell its infrastructure business Telxius ad American Tower: this operation was carried out in order to narrow Telefonica’s attention to Spain, Brazil, Germany and the United Kingdom and also to reduce its presence in Latin America. The strategy is in fact to reduce exposure to emerging markets that represent a risk, and to increase operational efficiency.

In 2014 it had acquired 11.11% of the pay TV Mediaset Premiumwhich no longer exists today.

A share costs 4 euros, so we’re talking about a low-cost investment that could prove to be very profitable.

From the beginning of the year to today, the company has recorded a + 18.11%.

Fox Corporation

It is a US company that operates in the sector of televisionfounded in March 2019 by Rupert Murdoch (founder of Sky).

It is the result of aacquisition by the 21st Century Fox by The Walt Disney Company: the assets that were not acquired by Disney were spun off and the new Fox Corp.

The company licenses news, sports and entertainment content, which is distributed by telecommunications companies and distributors online and via cable television. It also manages studios, theaters and editing rooms.

Someone acquisitions operated by Fox were: in 2019 Credible Labs for $397 million and the animation studio Bento Box Entertainment for $50 million, while in April 2020 the streaming service Tubi for $440 million, and finally in September 2021 TMZ from WarnerMedia.

A share costs about $33, and the yields are positiveso this is a title with a decent quality / price ratio.

How to buy telecom stocks

Getting into the stock market nowadays turns out to be relatively easy, as thanks to the web there are many more possibilities than before.

In fact, at one time it was only possible by relying on the Bank (an option that is still available today). Thanks to the current account, the investor can open his securities account and invest. This option, however, has costs that have been lowered thanks to the web.

And that is why currently themarket accessthanks to online platforms, it is not only more easily accessible, but also cheaper.

However, it is still a difficult market and which hides pitfalls: for this very reason, before starting, I advise you to study and better understand what to do.

Should you invest in communications stocks?

We have seen the best titles, now we can understand if it is worth investing in these companies.

Overall we can say that the telecommunications sector has been expanding for a few years: the internet is the basis of our lives, as well as communication in general. It’s hard to imagine that tomorrow we can wake up and no longer want the internet and to be connected 24 hours a day.

Furthermore, the entertainment sector, dominated by streaming services that offer television content on demand, is also growing.

For these reasons we are talking about a sector that shouldn’t be subjected to exaggerated jolts. In addition, many telecommunications stocks have large and predictable earnings; they pay reliable dividends, and some of them even have good price/earnings ratios.

We also mention the fact that these stocks often trade at very reasonable valuations, and this makes them a great defensive sector when there are downturns in the markets.

If you are building a diversified portfolio, a stock from the telecommunications sector could prove to be a good choice.

I obviously cannot give you a definitive answer as I do not know your financial situation, however I can advise you to read and learn before investing in the financial markets, as it is a difficult market full of pitfalls.

In this regard, I leave you some resources that may be useful to you!

However, if you think you need to take a step back, then here are some guides to deepen and clarify

Enjoy the reading!