Telecommunications have made great strides in just five years (consider the leaps they’ve made in the last 10 years!) due to changing consumer habits and preferences, speed, accessibility and safety, the industry continues to improve the experience for customers and the industry as a whole.
If you step into the Wayback Machine (the Way, Wayback Machine), you can go all the way back to 1877 and see the founding of AT&T (NYSE:T) through the Bell Telephone Company.
For buy-and-hold investors, you may want to take advantage of the high capital investments and dividend payouts that telecoms can offer.
What is the telecommunications sector?
The telecommunications sector involves companies that transmit data by speech, voice, audio or video, over a distance. The three sectors involved in the sector include telecommunications equipment, services and wireless communication:
- Telecom equipment: Telecommunications equipment is hardware used primarily for telecommunications and includes items such as transmission lines, multiplexers, and base transceiver stations.
- Telecom services: Telecommunications services include the distribution of voice, Internet, television, networking and data services over a wide area.
- Wireless communication: Wireless communication involves the transmission of information without wires, cables or any other form of electrical conductors. It integrates all connection methods between two or more devices using wireless signal through wireless communication technologies and devices. Wireless communication can be used for cell phones, wireless Internet access, wireless home network and more. It includes access to GPS units, garage door openers, keypads, headphones, satellite TV and telephones.
Why invest in the telecommunications sector?
So the question arises: why invest in telecom stocks when the Big 3 are continually going down? A few quick Debbie Downers of 2021:
While it’s true that individual telecommunications stocks live and breathe volatility, they can directly appeal to growth and dividend-oriented investors. If you have long-term growth in mind, you might like their high dividends and safe-haven status that follow traditional economic cycles and market ups and downs.
It’s true that you probably won’t get rich overnight with telecom stocks, but for those who take a more tortoise-less hare approach, you’ve got security, stability, and reliability in spades in the industry.
Telecom stocks to consider in 2022
Check out the following telecom stocks for high dividends and earnings.
Vodafone Group Plc (NASDAQ: VOD)
Vodafone Group Plc, headquartered in the United Kingdom, provides mobile services enabling customers to call, text and access data, fixed line services including broadband, television, voice and convergence. It offers telecommunications services under the GigaKombi and Vodafone One brands. Vodafone is focused on European markets, including Germany, Italy and Spain, which is why those in the US may say “Huh? What company was that, again?”
Its strong core asset portfolio and cash flow opportunities are evident through its conglomerate of ancillary services and products:
- Internet of Things (IoT) connectivity
- Automotive services and insurance
- smart meters
- Health Solutions
- Cloud and security portfolio including public and private cloud services
- Cloud-based applications and products to secure networks and devices International voice, IP transit and messaging services
The company delivered Group Services revenue growth of 2.8% in the first half of FY22 and EBITDAaL growth of 6.5%. The company delivered strong performance in Germany with services revenue growth of 1.2% and adjusted EBITDAaL growth of 7.7%. The company has shown sustainable growth and strong business momentum as well as better performance in Africa.
SK Telecom Co.Ltd. (NYSE: SKM)
SK Telecom Co. Ltd., headquartered in Seoul, Korea, provides wireless telecommunications and Internet services for mobile phones, wireless data, information communication and more.
SK Telecom Co.Ltd. is the largest wireless telecommunications operator in Korea in terms of revenue and customers. The company is part of the SK Group conglomerate, which owns 27% of the company.
One of the main reasons to consider investing in this monolith: 5G possibilities are ubiquitous for SK Telecom.
In its latest quarterly report, the company posted revenue of KRW 4.968 billion, operating profit of KRW 400 billion and net profit of KRW 736.5 billion. It posted growth of 5% and 11% since last year, respectively. SK Telecom’s mobile network operation business recorded revenue of KRW 3.027 billion, up 2.9% year-on-year.
ViacomCBS Inc. (NASDAQ: VIAC)
ViacomCBS Inc., headquartered in New York, New York, is a mass media company, creates and distributes content on a variety of platforms around the world. Its segments include Entertainment, Cable Networks, Publishing and Local Media and round up as follows:
- CBS television network
- CBS Television Studios
- CBS Studios International
- CBS Television Distribution
- CBS Interactive
- CBS Movies
- CBS All Access
- Showtime Networks
- CBS Sports Network
- Smithsonian Networks
- CBS TV Channels
- CBS Local Digital Media
The company also controls Simon & Schuster’s consumer book publishing, which includes Simon & Schuster, Pocket Books, Scribner and Atria Books.
In the third quarter, the company’s total revenue increased 13% year over year and showed growth in all revenue sources. Quarterly revenue topped $1 billion, which showed significant year-over-year growth of 62%.
The company added 4.3 million streaming subscribers globally and achieved 79% year-over-year growth in streaming subscription revenue, as well as 48% growth in year-over-year in streaming ad revenue, driven primarily by Pluto TV which attracted 54 million active viewers. users.
In short, the company’s underlying business outlook is improving, its asset collection and streaming business continue to soar. It has an excellent balance sheet and a lot of accumulated money, not to mention that it offers solid dividends. It’s time to get in on the action for a good value game with this legendary company. (Do it before everyone suddenly realizes what a great company it is!)
Despite the challenges, aim for the long term
If you’re looking for a retirement plan (hello, dividends!) or just a way to raise money, consider long-term telecommunications stocks. There’s a lot of competition in this industry, so keep an eye out for other players making innovative games in the space.
Should you invest $1,000 in Vodafone Group right now?
Before you consider the Vodafone Group, you’ll want to hear this.
MarketBeat tracks daily the highest rated and most successful research analysts on Wall Street and the stocks they recommend to their clients. MarketBeat has identified the five stocks that top analysts are quietly whispering to their clients to buy now before the market goes viral… and Vodafone Group was not on the list.
Although Vodafone Group currently has a “Buy” rating among analysts, top-rated analysts believe these five stocks are better buys.
See the 5 actions here
Companies mentioned in this article
Compare these actions Add these stocks to my watchlist