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 90.7% over the past 12 months, above the Russell 1000's total return of 79.4%. These performance figures and all statistics in the tables below are as of March 22, 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.
|Best Value Communications Stocks|
|Price ($)||Market Cap ($B)||12-Month Trailing P/E Ratio|
|Nexstar Media Group Inc. ( NXST)||154.84||6.7||8.9|
|Telephone and Data Systems Inc. ( TDS)||22.34||2.5||11.6|
|DISH Network Corp. ( DISH)||37.54||19.8||12.4|
- 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.
- 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.
- DISH Network Corp.: DISH Network Corp. sells broadcast satellite subscription television programming. The company also offers audio programming and interactive television services. DISH announced on March 8 that it would acquire Republic Wireless, a mobile virtual network operator that serves on the T-Mobile network. DISH will acquire roughly 200,000 customer relationships in the transaction, along with the Republic Wireless brand and other assets, for an undisclosed sum.
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.
|Fastest Growing Communications Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)||Revenue Growth (%)|
|Zoom Video Communications Inc. ( ZM)||328.50||96.5||1,640||368.8|
|Liberty Broadband Corp. ( LBRDA)||150.37||29.4||188.0||871.0|
|Nexstar Media Group Inc. (NXST)||154.84||6.7||237.7||25.1|
- 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 and Web across platforms including mobile devices, desktops, and telephones. For Q4 FY 2021, ended January 31, Zoom's net income grew by roughly 17-fold YOY. The company grew its base of customers with more than 10 employees by roughly 470% YOY during the quarter.
- Liberty Broadband Corp.: Liberty Broadband Corp. operates and owns interests in communications companies including TruePosition and Time Warner Cable. The company announced on March 15 that its board of directors declared a quarterly dividend of $0.43750001 per share for holders of Series A Cumulative Redeemable Preferred Stock. The dividend is payable on April 15, 2021 to holders of record as of March 31.
- Nexstar Media Group Inc.: See above for company description.
These are the communications stocks that had the highest total return over the last 12 months.
|Communications Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|ViacomCBS Inc. ( VIAC)||100.34||62.2||762.0|
|Pinterest Inc. ( PINS)||72.35||45.5||492.5|
|Zillow Group Inc. ( ZG)||143.89||34.6||443.2|
|Communication Services Select Sector SPDR ETF (XLC)||N/A||N/A||90.7|
- ViacomCBS Inc.: ViacomCBS, Inc. is a diversified media company that creates and distributes content across a variety of platforms, including through cable, network television, local television, publishing. Its operations include CBS Television Network, Showtime Networks, and MTV. On March 18, ViacomCBS announced it had agreed to a continuing 11-year multiplatform rights agreement with the National Football League. The agreement, which begins in 2023, will increase the number of football games broadcasted and streamed by CBS Sports.
- 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. In March, Zillow announced plans to increase its workforce by roughly 40% by hiring approximately 2,000 new employees in 2021.
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YCharts. "Financial Data." Accessed March 23, 2021.
DISH Network Corp. "DISH to acquire Republic Wireless." Accessed March 23, 2021.
Zoom Video Communications Inc. "Zoom Video Communications Reports Fourth Quarter and Fiscal Year 2021 Financial Results." Accessed March 23, 2021.
Liberty Broadband Corp. "Liberty Broadband Corporation Declares Quarterly Cash Dividend." Accessed March 23, 2021.
ViacomCBS Inc. "ViacomCBS and NFL Reach New Long-Term Multiplatform Rights Agreement Through the 2033 Season." Accessed March 23, 2021.
Zillow Group Inc. "Zillow Announces Plans to Hire More Than 2,000 Employees Nationwide in 2021." Accessed March 23, 2021.