In this article we discuss the 5 best communication stocks to buy now. If you want to read our detailed analysis of the communication sector, go directly to the 10 Best Communication Stocks to Buy Now.
5. Zoom Video Communications, Inc. (NASDAQ: ZM)
Number of Hedge Fund Holders: 59
Market Cap: $85.346 billion
Zoom Video Communications, Inc. (NASDAQ: ZM) is one of the biggest beneficiaries of the COVID-19 pandemic as its revenues quadrupled to approximately $2.65 billion in 2020. The company is a provider of a video-first communications platform in the Americas, Europe, the Asia Pacific, Middle East, and Africa. The company was founded in 2011 and is headquartered in San Jose, California. It now controls over 40% of the US web conferencing share with traditional workplaces disrupted due to the ongoing pandemic. Zoom Video Communications, Inc. (NASDAQ: ZM) had a total revenue of $882.5 million in the fourth quarter of 2020 which was a 369% year-over-year increase. The full fiscal year total revenue amounted to $2.65 billion, up 326% year-over-year, according to the company’s earnings report. GAAP net income attributable to common stockholders for the fiscal year was $671.5 million, or $2.25 per share, compared to GAAP net income attributable to common stockholders of $21.7 million, or $0.09 per share for fiscal year 2020. Zoom Video Communications, Inc. (NASDAQ: ZM) is a brand-name stock with a serious upside which makes this cloud-based web conferencing company one of the best communication stocks to buy now.
4. Charter Communications, Inc. (NASDAQ: CHTR)
Number of Hedge Fund Holders: 90
Market Cap: $131.529 billion
Charter Communications, Inc. (NASDAQ: CHTR) is a broadband connectivity and cable operator company that serves residential and commercial customers in the US. Based in Stamford, Connecticut, the company serves approximately 31 million customers in 41 states. Over the past 5 years, the stock price of Charter Communications, Inc. (NASDAQ: CHTR) is up an impressive 192%. Warren Buffett’s Berkshire Hathaway has also included the company in its portfolio. As of Mar 31, 2021, Charter had 31.4 million total customer relationships, with 1.7 million net new customer relationships added over the last twelve months. Moreover, the company earned revenues of $12.5 billion in 2020 which was a 6.7% year-over-year increase. In 2021, the first quarter earnings per share amounted to $4.11 which was up 121% from the preceding year. New Street analyst Jonathan Chaplin sees Charter’s subscriber growth picking up as industrywide churn increases because it has faster speeds and a more competitive product than its competitors. The company had 27.3 million residential internet customers in 2020, up 7.4% year over year. With a strong financial performance, Charter Communications, Inc. (NASDAQ: CHTR) has been selected as one of the 10 best communication stocks to buy now.
At the end of the fourth quarter of 2020, 90 hedge funds in the database of Insider Monkey held stakes worth $11.2 billion in Charter which is an increase from 88 hedge funds in the preceding quarter holding stakes worth $11.9 billion.
Avenir Capital said in its letter that Charter Communications, Inc. (NASDAQ: CHTR) was one of their biggest gainers. Here is what Avenir Capital has to say about Charter Communications in its letter:
“Our third biggest gainer was Charter Communications, the U.S. broadband connectivity business. Our opportunity to buy Charter came in early 2018 when the business was sold off heavily on fears of cable TV cord cutting and the impact of streaming businesses such as Netflix on traditional cable. We felt the bulk of Charter’s underlying value came from its broadband internet business, a highly concentrated industry in which Charter holds a dominant position, not the traditional cable TV business. Charter’s share price has increased by 112% since our initial purchase at US$313 per share, including an increase of 35% in 2020 to end the year at US$665 per share.”
3. T-Mobile US, Inc. (NASDAQ: TMUS)
Number of Hedge Fund Holders: 103
Market Cap: $170.782 billion
T-Mobile US, Inc. (NASDAQ: TMUS) is a provider of mobile communication services in the US, Puerto Rico, and the United States Virgin Islands. The company offers voice, messaging and data services and have over 102.1 million customers in the prepaid, postpaid, and wholesale markets. It was founded in 1994 and is based in Bellevue, Washington. According to Oppenheimer analyst Tim Horan, the TMUS stock is performing very well and is outperforming its competitors in the telecom sector. T-Mobile US, Inc. (NASDAQ: TMUS) delivered leading postpaid phone net additions and with its acquisition of Sprint, its customer traffic has greatly increased. Additionally, 2021 is expected to be a peak investment year for the company as it invests in a 5G network. Sprint merger integration and customer acquisition make it one of the best communication stocks to buy now. Furthermore, T-Mobile has also announced marketing collaborations with Alphabet Inc. (NASDAQ: GOOG)’s Google. With the acquisition of Sprint, the new T-Mobile owns more mid-band radio spectrum than AT&T or Verizon which could provide an important edge as 5G wireless services are rolled out. The company’s revenue rose 78% to $19.76 billion in 2020 with an earnings per share of $2.65. In 2020, it is forecasted that T-Mobile US, Inc. (NASDAQ: TMUS) will be able to reach 250 million people with its mobile 5G network.
At the end of the fourth quarter of 2020, 103 hedge funds in the database of Insider Monkey held stakes worth $9.1 billion in the firm which is an increase from 94 hedge funds in the previous quarter holding stakes worth $7.5 billion.
2. AT&T Inc. (NYSE: T)
Number of Hedge Fund Holders: 58
Market Cap: $233.133 billion
AT&T Inc. (NYSE: T) was incorporated in 1983 and is headquartered in Dallas, Texas. It provides telecommunication, technology, and media services worldwide. AT&T Inc. (NYSE: T) beat Wall Street revenue targets as the reopening of the U.S. economy following pandemic-linked restrictions boosted smartphone sales and the media business. The company reported that it had added 595,000 net wireless phone subscribers in the first quarter of 2021, more than double what analysts had expected. AT&T has been investing heavily in its new 5G wireless network and bundling its streaming service HBO Max for free with certain phone plans to retain customers and keep them from switching to competitors. Revenue for the company was up nearly 3% at $43.9 billion and this momentum is expected to continue as the US economy reopens. It also added 800,000 postpaid wireless phone customers vs. estimates for a 414,000 gain. AT&T Inc. (NYSE: T) also signed a five-year contract with Nokia Corporation (NYSE: NOK) to deploy a 5G network on the company’s C-Band spectrum in different parts of the United States. With a market cap of $233.133 billion the company has landed a top spot in our 10 best communication stocks to buy now list.
At the end of the fourth quarter of 2020, 58 hedge funds in the database of Insider Monkey held stakes worth $1.04 billion in the firm.
Nelson Capital Management, in its Q1 2021 investor letter, mentioned AT&T Inc. (NYSE: T). Here is what Nelson Capital Management has to say about AT&T Inc. in its letter:
“Nelson Capital stayed busy i n t he first quarter, making several adjustments within our core portfolio. In the communication services sector, we sold AT&T (tkr: T). Over the years, AT&T has made several poor acquisitions, especially in the content realm, leaving the company saddled with debt and unable to change directions.”
1. Verizon Communications Inc. (NYSE: VZ)
Number of Hedge Fund Holders: 67
Market Cap: $247.445 billion
Verizon Communications Inc. (NYSE: VZ) is a New York-based communications company that provides its services to consumers worldwide. As of 2020, the company had more than 94 million wireless retail connections, 4 million Fios video connections, and 482 million broadband connections making it one of the leading companies in the telecom sector. Verizon Communications Inc. (NYSE: VZ) has recently announced its partnership with the Oak View Group to bring the power of 5G ultra wideband to select world-class OVG venues including the New York UBS Arena, Coachella Valley Arena, and the Seattle Climate Pledge Arena. Verizon Communications Inc. (NYSE: VZ) also provides businesses with Internet of Things connectivity in 170 countries worldwide. The company has shown strong financial performance in the recent years. In the fourth quarter of 2020, Verizon reported earnings of $1.11 per share resulting in full year earnings of $4.30 per share. Adjusted EBITDA for the quarter was $11.7 billion as compared to $11.1 billion last year which is a 5.3% increase driven by service and other revenue growth. The company’s full year consolidated adjusted EBITDA totaled $47.1 billion and adjusted EBITDA margin was 36.7%, 90 basis points higher than 2019. The company also added Discovery to their list of partnerships which includes Apple and Disney as well. Verizon had a strong year which puts it in a good position going into 2020 and makes it one of the best communication stocks to buy now.
At the end of the fourth quarter of 2020, 67 hedge funds tracked by Insider Monkey held stakes worth $10.5 billion in the firm which is an increase from 65 hedge funds in the preceding quarter holding stakes worth $2.75 billion.
You can also take a peek at 10 Best Wind Energy and Renewables Stocks to Buy in 2021 and 10 Best Video Conferencing Stocks to Buy.
