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 falling advertising at some companies.
Communications stocks, represented by the Communication Services Select Sector SPDR ETF (XLC), have slightly outperformed the broader market. XLC has provided a total return of 42.7% over the past 12 months, above the Russell 1000's total return of 38.6%. These market performance figures and all statistics in the tables below are as of July 15, 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)||143.80||6.2||7.7|
|ViacomCBS Inc. ( VIAC)||41.29||26.7||9.1|
|Fox Corp. ( FOX)||33.88||19.7||10.1|
- 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.
- ViacomCBS Inc.: ViacomCBS is a global multimedia company focused on creating premium content and experiences for audiences across the globe. 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. On July 15, ViacomCBS announced that it had reached comprehensive, multi-year distribution agreements with Charter Communications, Inc. (CHTR). The agreements provide for the continued carriage of ViacomCBS portfolio of networks for Spectrum customers. The deal also includes the licensing of ViacomCBS's suite of streaming services. Charter serves more than 31 million customers. Other terms were not disclosed.
- Fox Corp.: Fox is an entertainment company which produces and licenses news, sports, and entertainment content. The company's content is distributed by telecommunications companies and online distributors and via cable television, direct broadcast satellite, and similar offerings. The company also manages studios, theaters, editing bays, and other production facilities.
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 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 (%)|
|The Interpublic Group of Companies Inc. ( IPG)||32.06||12.6||2,200||-4.4|
|T-Mobile US Inc. (TMUS)||148.34||185.0||-32.7||77.8|
|DISH Network Corp. ( DISH)||39.91||21.1||661.5||39.8|
- The Interpublic Group of Companies Inc.: The Interpublic Group of Companies is a group of advertising and marketing service companies. It specializes in consumer advertising, digital marketing, communications planning and media buying, public relations, data management, and more. The company announced on July 7 the launch of Performance Art, a new global agency focused on technology, deep data, and customer relationship management. The agency will partner closely with a range of IPG companies.
- T-Mobile US Inc.: T-Mobile is a leading telecommunications services company and national wireless carrier. The company offers business, consumer, and prepaid options as well as data plans. On July 16, T-Mobile announced that it, along with a group of partners, had completed the first ever wireless call to combine authenticated Caller ID and Rich Call Data (RCD). The use of RCD is considered an important step in the protection of customers from scam calls.
- DISH Network Corp.: DISH provides direct broadcast satellite subscription television services, as well as interactive television programming, audio programming, and similar products. The company also offers targeted advertising services.
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 (%)|
|Pinterest Inc. ( PINS)||70.03||44.6||184.4|
|Roku Inc. ( ROKU)||406.00||53.8||163.3|
|News Corp. ( NWSA)||24.91||14.7||99.0|
|Communication Services Select Sector SPDR ETF (XLC)||N/A||N/A||42.7|
- 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.
- Roku Inc.: Roku builds and markets wireless enabled devices used to stream audio and video content from the Internet to home entertainment systems. The company serves customers around the world.
- News Corp.: News Corp. is a media and information services company focused on news and information, digital real estate, book publishing, and cable network programming. The company serves customers around the world. In its most recent quarterly earnings report, Q3 FY 2021, ended March 31, News Corp. posted net income of $96 million versus net loss of $1 billion one year prior, as well as revenue growth of 3% YOY. These improvements were driven by strong momentum across the company as well as non-cash impairment charges of $1.1 billion in the prior year.
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YCharts. "Financial Data." Accessed July 17, 2021.
ViacomCBS Inc. "ViacomCBS and Charter Communications Reach Comprehensive Distribution Agreements." Accessed July 17, 2021.
The Interpublic Group of Companies. "IPG Launches Performance Art, a Data-Led Creative/CRM Agency." Accessed July 17, 2021.
T-Mobile US. "T-Mobile and Partners Complete First-Ever Wireless Call with Rich Call Data." Accessed July 17, 2021.
News Corp. "NEWS CORPORATION REPORTS THIRD QUARTER RESULTS FOR FISCAL 2021," Page 1. Accessed July 19, 2021.