5 Best Telecom Stocks to Invest In

In this article, we discuss 5 best telecom stocks to buy right now. If you want to see more stocks in this selection, check out 11 Best Telecom Stocks To Buy Right Now. 

5. AT&T Inc. (NYSE:T)

Number of Hedge Fund Holders: 61

AT&T Inc. (NYSE:T) provides telecommunications, media, and technology services worldwide. It is one of the best telecom stocks to buy right now. On December 15, AT&T Inc. (NYSE:T) declared a $0.2775 per share quarterly dividend, in line with previous. The dividend is payable on February 1, to shareholders of record on January 10. The dividend yield on December 26 came in at 6.06%. 

On December 8, Argus analyst Joseph Bonner upgraded AT&T Inc. (NYSE:T) to Buy from Hold with a $24 price target. The company’s Mobility business is supporting its overall results while attesting to the management’s strategic realignment away from entertainment assets and towards primary wireless and fiber broadband expansion strategy, the analyst told investors in a research note. 

According to Insider Monkey’s data, 61 hedge funds were bullish on AT&T Inc. (NYSE:T) at the end of Q3 2022, compared to 55 funds in the prior quarter. D E Shaw is the largest stakeholder of the company, with 14 million shares worth $214.3 million. 

Here is what Chartwell Investment Partners has to say about AT&T Inc. (NYSE:T) in its Q2 2022 investor letter:

“In the Dividend Equity accounts, the three best performers in Q2 include AT&T (NYSE:T, 2.5%), up 17.1%. AT&T completed the spin off of the WarnerMedia business (HBO, CNN, etc.), and the market seemed to like the “back-to-basics” approach. Also, the telco business is expected to do relatively well in an inflationary environment.”

4. American Tower Corporation (NYSE:AMT)

Number of Hedge Fund Holders: 62

American Tower Corporation (NYSE:AMT) is one of the largest global REITs that owns, operates, and develops multi-tenant communications real estate. On December 8, American Tower Corporation (NYSE:AMT) declared a $1.56 per share quarterly dividend, a 6.1% increase from its prior dividend of $1.47. The dividend is payable on February 2, 2023 to shareholders of record on December 28. The dividend yield on December 26 came in at 6.06%. 

On December 14, Wells Fargo analyst Eric Luebchow raised the price target on American Tower Corporation (NYSE:AMT) to $245 from $225 and kept an Overweight rating on the shares. The analyst believes the tower sector remains a primary defensive sector heading into an uncertain 2023, with steady demand trends as carrier activity remains high.

According to Insider Monkey’s data, 62 hedge funds were long American Tower Corporation (NYSE:AMT) at the end of September 2022, compared to 52 funds in the last quarter. Charles Akre’s Akre Capital Management is the biggest position holder in the company, with approximately 7 million shares worth $1.5 billion. 

Here is what Baron Real Estate Fund has to say about American Tower Corporation (NYSE:AMT) in its Q2 2022 investor letter:

“American Tower is a leading global tower company with 220,000 communication sites globally and over 40,000 in the U.S. We added to our position during the market dislocation and as it became increasingly clear that the company would put permanent equity financing in place at better-than-expected terms for its previously announced acquisition of CoreSite (thereby removing the “equity overhang”).

In addition, the company stepped back from a large potential deal in Europe, which would have required significant incremental funding, due to unfavorable contract terms and price. This decision further reinforced our confidence in management’s capital allocation discipline knowing that these were highly sought-after assets.”

3. Verizon Communications Inc. (NYSE:VZ)

Number of Hedge Fund Holders: 62

Verizon Communications Inc. (NYSE:VZ) is a New York-based company that offers communications, technology, information, and entertainment products and services to consumers, businesses, and governmental entities worldwide. It is one of the premier telecom stocks to invest in. On December 1, Verizon Communications Inc. (NYSE:VZ) declared a $0.6525 per share quarterly dividend, in line with previous. The dividend is payable on February 1, 2023 to shareholders of record on January 10. 

On December 16, Tigress Financial analyst Ivan Feinseth maintained a Buy recommendation on Verizon Communications Inc. (NYSE:VZ) but lowered the price target on the shares to $64 from $68. Verizon Communications Inc. (NYSE:VZ)’s investments in constructing its 5G network will begin to pay off going forward, supporting improved operational and financial performance, the analyst told investors in a research note. He cited the share re-rating for the target cut but said long-term 5G wireline and wireless subscriber growth “remains the big picture.”

According to Insider Monkey’s third quarter database, 62 hedge funds were long Verizon Communications Inc. (NYSE:VZ), compared to 58 funds in the prior quarter. Ken Griffin’s Citadel Investment Group is the largest stakeholder of the company, with 5.2 million shares worth $200.4 million. 

Here is what Mawer Investment Management has to say about Verizon Communications Inc. (NYSE:VZ) in its Q3 2022 investor letter:

“There are a few other segments of our portfolios that displayed weakness in the quarter. Cable and telecommunication companies have been an area that has lagged the broader market as their worlds are increasingly colliding. Companies such as Verizon (NYSE:VZ) have been impacted as wireless operators are spending heavily to attract internet subscribers with fixed wired access and the cable companies are trying to build wireless businesses.”

2. Comcast Corporation (NASDAQ:CMCSA)

Number of Hedge Fund Holders: 73

Comcast Corporation (NASDAQ:CMCSA) is a Pennsylvania-based media and technology company that operates through Cable Communications, Media, Studios, Theme Parks, and Sky segments. Comcast Corporation (NASDAQ:CMCSA) is one of the best telecom stocks to invest in. The company is set to pay a $0.27 per share quarterly dividend on January 25, 2023 to shareholders of record as of January 4. The dividend yield on December 26 came in at 3.07%. 

On December 12, Morgan Stanley analyst Benjamin Swinburne forecasted limited EBITDA growth and dropping free cash flow for cable and satellite operators in 2023 and remains “broadly on the sidelines” among the group until rising capex drives faster top line. In that context, he prefers Overweight-rated Comcast Corporation (NASDAQ:CMCSA), which he said trades at “the lowest valuation in the coverage group despite what we see as the continued potential for double-digit EPS growth over time.” 

According to Insider Monkey’s data, Comcast Corporation (NASDAQ:CMCSA) was part of 73 hedge fund portfolios at the end of Q3 2022, compared to 75 in the earlier quarter. Jean-Marie Eveillard’s First Eagle Investment Management is the largest stakeholder of the company, with 31.6 million shares worth over $928 million. 

ClearBridge Investments made the following comment about Comcast Corporation (NASDAQ:CMCSA) in its Q3 2022 investor letter:

“The Strategy was not completely insulated to macro headwinds and some companies saw tough comparisons after strong pull forwards in demand during the COVID-19 pandemic. Media companies including Comcast Corporation (NASDAQ:CMCSA) were hurt by both factors in the quarter.

After extremely strong broadband growth during the early days of the pandemic, Comcast is now experiencing slowing to negative growth in its broadband business due to new competition and less consumer moving activity along with headwinds on the programming side, where advertising budgets have been more stressed.”

1. T-Mobile US, Inc. (NASDAQ:TMUS)

Number of Hedge Fund Holders: 100

T-Mobile US, Inc. (NASDAQ:TMUS) is an American provider of mobile communications services in the United States, Puerto Rico, and the United States Virgin Islands. It is one of the elite telecom stocks to consider. On December 12, T-Mobile US, Inc. (NASDAQ:TMUS) announced that it has enhanced its network coverage and capacity, in addition to deploying a new layer of 5G spectrum nationwide. 

On November 15, Tigress Financial analyst Ivan Feinseth raised the price target on T-Mobile US, Inc. (NASDAQ:TMUS) to $202 from $195 and reiterated a Buy rating on the shares. The company’s growing ability to leverage its “massive “5G high-speed network will continue to drive increasing customer gains and revenue growth”, the analyst told investors in a research note. The analyst noted that T-Mobile US, Inc. (NASDAQ:TMUS)’s leadership position in 5G continues to drive “industry-leading postpaid service revenue and cash flow growth.”

According to Insider Monkey’s Q3 data, 100 hedge funds were long T-Mobile US, Inc. (NASDAQ:TMUS), compared to 96 funds in the last quarter. Warren Buffett’s Berkshire Hathaway is the largest position holder in the company, with 5.2 million shares worth $703.3 million. 

In its Q4 2021 investor letter, ClearBridge Investments shared its stance on T-Mobile US, Inc. (NASDAQ:TMUS):

“As mentioned, the communication services sector has come under some pressure, and irrational pricing competition has negatively impacted wireless industry growth and profitability of late, weighing on T-Mobile. Faced with these headwinds, and with pressure from other wireless carriers and cable companies that could cause the company to cede share in subscriber growth in 2022, we exited our position in the fourth quarter.”

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