Top Communications Stocks for May 2021

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). The COVID-19 pandemic has sharply boosted user activity for many entertainment and streaming services, while also causing plunging advertising at some companies.

Communications stocks, represented by the Communication Services Select Sector SPDR ETF (XLC), have outperformed the broader market. XLC has provided a total return of 59.6% over the past 12 months, above the Russell 1000’s total return of 52.8%. These market performance figures and all statistics in the tables below are as of April 20, 2021.

Here are the top 3 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.

^{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. The company announced in late February financial results for its 2020 fiscal year (FY), which ended Dec. 31, 2020. Net income rose 242.0% as annual net revenue grew 48.1%. Profits were boosted by operating expenses growing at a much slower pace than revenue as well as a substantial increase in income from equity investments and by a net gain related to pension and other postretirement plans.
• 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. The company announced in early April that ViacomCBS Networks International has agreed to acquire Chilevisión from WarnerMedia, a division of AT&T Inc. (T). The transaction will expand ViacomCBS’s international business in Latin America. The financial terms of the deal were not disclosed.
• Telephone and Data Systems Inc.: Telephone and Data Systems is a diversified telecommunications company that sells cellular, telephone, broadband cable, and Internet protocol services to U.S. consumers.

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.

^{Source: YCharts}

• Zoom Video Communications Inc.: Zoom Video Communications is a provider of video-first communication platform and Web conferencing services. It offers cloud-based HD video conferencing, mobility, and Web meetings. The company announced in early March financial results for FY 2021, which ended Jan. 31, 2021. Net income rose 2,556.9% as annual revenue grew 325.8%. Zoom’s video-conferencing services became in high demand amid the acceleration in the work-from-home economy triggered by the COVID-19 pandemic. The company said that it was an unprecedented year in which it significantly scaled its business to provide critical communication and collaboration services during the pandemic.
• Liberty Broadband Corp.: Liberty Broadband operates as a holding company engaged in the cable, broadband, and mobile location technology industries. It owns interests in communications companies, including Charter Communications Inc. and TruePosition Inc.
• Nexstar Media Group Inc.: See above for company description.

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

^{Source: YCharts}

• Pinterest Inc.: Pinterest operates a social networking site that allows users to share photos, as well as small-scale animated GIFs and videos in a pinboard-style format.
• Zillow Group Inc.: Zillow Group is an e-commerce company that offers real estate listings, mortgages, and information about homes. The company’s clients include homeowners, buyers, sellers, renters, and real estate professionals. Zillow announced in the first half of February that it had agreed to acquire ShowingTime.com Inc., an online scheduling platform for home showings. The transaction was valued at $500 million.
• Twilio Inc.: Twilio develops communications software and a cloud-based platform for web developers. Its platform enables developers to integrate phone calls, internet protocol voice communications, and text messages into web, mobile, and phone applications.

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. While we believe the information provided herein is reliable, we do not warrant its accuracy or completeness. The views and strategies described on 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.

View Article Origin Here