Top Communications Stocks for June 2022

PARA, TWTR, and FWONA are top for value, growth, and momentum, respectively

The communications sector is composed of a broad range of companies that sell phone and internet services via traditional landline, broadband, or wireless. The communications 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 Meta Platforms Inc. (formerly Facebook), Comcast Corp., and T-Mobile US Inc.

Communications stocks, represented by a benchmark exchange-traded fund (ETF)—The Communication Services Select Sector SPDR ETF (XLC)—have significantly underperformed the broader market as represented by the Russell 1000 Index. XLC has provided a total return of -24.1% over the past 12 months, behind the benchmark Russell 1000 Index’s total return of -7.0%. These market performance figures and all statistics in the tables below are as of May 20, 2022.

Here are the top three communications stocks with the best value, the fastest 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 that you’re paying less for each dollar of profit generated.

Best Value Communications Stocks   Price ($) Market Capitalization (Market Cap) ($B) 12-Month Trailing P/E Ratio Paramount Global (PARA) 32.64 21.2 5.3 Altice USA Inc. (ATUS) 10.79 4.9 5.4 Lumen Technologies Inc. (LUMN) 11.06 11.4 5.5

Source: YCharts

  • Paramount Global: Paramount Global, formerly ViacomCBS, is a global media and entertainment company operating in the areas of TV entertainment, cable networks, and filmed entertainment. The company’s businesses include a portfolio of streaming services, CBS, Paramount Pictures, and other similar ventures. Paramount announced in early May that Paramount+, its global streaming service, would launch in the U.K. and Ireland on June 22, 2022. The company also said the service would also launch in South Korea in June, followed by expected launches in Italy, Germany, France, Switzerland, and Austria in the second half of the year.
  • Altice USA Inc.: Altice USA is a broadband communications and video service provider. It delivers broadband, video, mobile, proprietary content, and advertising services to customers across the U.S.
  • Lumen Technologies Inc.: Lumen Technologies is a technology company that integrates network, edge cloud, security, communication, and collaboration solutions into one platform. The company announced in late March the appointment of Chris Stansbury to the role of chief financial officer (CFO). Stansbury most recently served as senior vice president and CFO of Arrow Electronics Inc.

Fastest Growing Communications Stocks

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 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 figure or the other unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of more than 2,500% were excluded as outliers.

Fastest Growing Communications Stocks   Price ($) Market Cap ($B) EPS Growth (%) Revenue Growth (%) Twitter Inc. (TWTR) 38.29 28.5 662.5 15.9 Zillow Group Inc. (ZG) 40.23 10.4 -70.0 249.5 Madison Square Garden Sports Corp. (MSGS) 163.20 3.9 354.5 84.6

Source: YCharts

  • Twitter Inc.: Twitter is a global social media company. It offers a social media platform that allows users to connect, express their opinions, and share other media content. Elon Musk made a $44-billion offer to buy Twitter and take it private in April. However, the deal’s closing may hinge on whether Twitter’s figure for the number of bots on its platform is accurate. Bots are automated accounts. The company says bots comprise less than than 5% of its total accounts, but Musk believes it is higher. If he is correct, he’s expected to try to negotiate a lower purchase price or try to get out of the deal altogether.
  • Zillow Group Inc.: Zillow Group offers an online real estate platform. The platform enables users to buy, sell, and rent homes as well as search financing options. The company also offers a suite of marketing software and technology for the real estate industry.
  • Madison Square Garden Sports Corp.: Madison Square Garden Sports is a professional sports company that owns professional sports team franchises and eSports teams. The company also operates two sports team performance centers. Its assets include the New York Knicks NBA franchise, as well as the NHL’s New York Rangers.

Communications Stocks with the Most Momentum

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

Communications Stocks with the Most Momentum   Price ($) Market Cap ($B) 12-Month Trailing Total Return (%) Liberty Formula One Group (FWONA) 57.21 13.3 41.3 Nexstar Media Group Inc. (NXST) 174.00 7.0 19.3 World Wrestling Entertainment Inc. (WWE) 60.91 4.5 12.5 Russell 1000 Index N/A N/A -7.0 The Communication Services Select Sector SPDR ETF (XLC) N/A N/A -24.1

Source: YCharts

  • Liberty Formula One Group: Liberty Formula One Group operates businesses across the media, communications, and entertainment industries. The company draws revenue from businesses including Liberty SiriusXM Group, Formula One Group, and the Braves Group.
  • Nexstar Media Group Inc.: Nexstar Media Group is a diversified media company that owns, operates, and provides services to broadcast stations across the U.S. It operates television, digital, and mobile media platforms.
  • World Wrestling Entertainment Inc.: World Wrestling Entertainment is an integrated media and global entertainment company. It delivers family-friendly entertainment on its television programming, premium live events, digital media, and publishing platforms. The company announced in early May financial results for Q1 of its 2022 fiscal year (FY), the three-month period ended March 31, 2022. Net income rose 50.9% as record revenue grew 26.5% compared to the year-ago quarter.

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