NXST, TMUS, and ROKU are top for value, growth, and momentum, respectively
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).
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 36.7% over the past 12 months, above the Russell 1000’s total return of 32.9%. These market performance figures and all statistics in the tables below are as of Aug. 19, 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)||145.36||6.1||6.9|
|ViacomCBS Inc. (VIAC)||40.47||26.2||7.6|
|Fox Corp. (FOX)||33.81||19.4||9.4|
- 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. On Aug. 20, Nexstar announced that it had acquired The Hill, a political digital media news platform, for $130 million. The Hill has 48 million average monthly users and 2.2 billion total pageviews in 2020. The acquisition supplements Nexstar’s growing digital platform.
- ViacomCBS Inc.: ViacomCBS is a global multimedia company focused on creating premium content and experiences for audiences across the globe. The company provides cable networks, content production and distribution, television stations, and digital streaming services. It also operates other internet-based businesses as well as consumer publishing. The company announced on Aug. 18 a partnership with Comcast to launch SkyShowtime, a subscription video on demand service, in more than 20 European territories encompassing 90 million homes. The service is expected to launch starting in 2022.
- Fox Corp.: Fox is an entertainment company which produces and licenses news, sports, and entertainment content. The company’s content is distributed by telecommunications companies and online distributors and via cable television, direct broadcast satellite, and similar offerings. The company also manages studios, theaters, editing bays, and other production facilities.
These are the top communications stocks as ranked by a growth model that scores companies based on a 50/50 weighting of their most recent quarterly YOY percentage revenue growth and their most recent quarterly YOY earnings-per-share (EPS) growth. Both sales and earnings are critical factors in the success of a company. Therefore ranking companies by only one growth metric makes a ranking susceptible to the accounting anomalies of that quarter (such as changes in tax law or restructuring costs) that may make one or the other figure unrepresentative of the business in general. Companies with quarterly EPS or revenue growth of over 2,500% were excluded as outliers.
|Fastest Growing Communications Stocks|
|Price ($)||Market Cap ($B)||EPS Growth (%)||Revenue Growth (%)|
|T-Mobile US Inc. (TMUS)||139.83||174.5||766.7||12.9|
|Alphabet Inc. (GOOGL)||2,708.98||1,806||169.1||61.6|
|Facebook Inc. (FB)||355.45||1,002||100.6||55.6|
- T-Mobile US Inc.: T-Mobile is a leading telecommunications services company and national wireless carrier. The company offers business, consumer, and prepaid options as well as data plans. T-Mobile suffered a cyberattack in mid-August which compromised the personal data of more than 13 million current T-Mobile postpaid customers and more than 40 million former or prospective T-Mobile customers.
- Alphabet Inc.: Alphabet is a holding company and the parent of Google. Through subsidiaries, the company provides web-based search, maps, software, mobile operating systems, advertisements, consumer content, and more. Note that this listing refers to class A shares of Alphabet.
- Facebook Inc.: Facebook operates the world’s largest social networking website, which facilities the sharing of information, photos, videos, and website links. On Aug. 19, the U.S. Federal Trade Commission filed an amended complaint in federal court seeking to break up Facebook over allegations that the company has engaged in anti-competitive practices in several areas. The updated filing comes two months after an earlier complaint was dismissed.
These are the communications stocks that had the highest total return over the last 12 months.
|Communications Stocks with the Most Momentum|
|Price ($)||Market Cap ($B)||12-Month Trailing Total Return (%)|
|Roku Inc. (ROKU)||344.72||46.0||130.0|
|The Interpublic Group of Companies Inc. (IPG)||36.87||14.5||108.9|
|Alphabet Inc. (GOOG)||2,731.40||1,821||75.3|
|Communication Services Select Sector SPDR ETF (XLC)||N/A||N/A||36.7|
- Roku Inc.: Roku offers a TV streaming platform and streaming devices. The platform acts as a TV streaming ecosystem enabling consumers to seamlessly view thousands of channels on a wide range of streaming services, and enables content providers and advertisers to reach consumer audiences in markets around the globe. For Q2 2021, Roku reported net income of $73.5 million on robust revenue growth compared with a net loss for one year prior. The company saw total net revenue climb by 81.2% YOY for the quarter. The record revenue growth was driven by strong performance in platform monetization.
- 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.
- Alphabet Inc.: See company description above. Note that this listing refers to class C shares of Alphabet.
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YCharts. “Financial Data.” Accessed Aug. 20, 2021.
Nexstar Media Group Inc. “Nexstar Acquires The Hill, a Leading Independent Political Digital Media Platform, for $130 Million.” Accessed Aug. 20, 2021.
ViacomCBS Inc. “Comcast and ViacomCBS Announce “SkyShowtime,” a New Streaming Service to Launch in Select European Markets.” Accessed Aug. 20, 2021.
T-Mobile US Inc. “T‑Mobile Shares Updated Information Regarding Ongoing Investigation into Cyberattack.” Accessed Aug. 20, 2021.
CNN. “FTC files fresh antitrust complaint seeking to break up Facebook.” Accessed Aug. 20, 2021.
Roku Inc. “Q2 2021 Shareholder Letter,” Page 1. Accessed Aug. 20, 2021.