The telecom industry continues to thrive amid robust demand. On August 31, 2022, The Department of Commerce’s National Telecommunications and Information Administration (NTIA) declared that Louisiana would be the first state to receive $2.9 million from the Bipartisan Infrastructure Law to deploy affordable, reliable, and high-speed internet. This is part of the Biden-Harris Administration’s Internet for All initiative.
Moreover, on August 11, 2022, NTIA allotted more than $146 million in funds from the Consolidated Appropriations Act 2021 to tribal entities in New Mexico. This venture is expected to bring about all-around inclusive connectivity.
Amid rapid digitalization, the need for smooth network and broadband connections has soared. According to Precedence Research, the global telecom services market is projected to grow at a CAGR of 4.9% from 2022 to 2030.
Given this backdrop, investors could consider buying fundamentally strong telecom giants Verizon Communications Inc. (VZ), AT&T Inc. (T), and Lumen Technologies, Inc. (LUMN).
Verizon Communications Inc. (VZ)
VZ and its subsidiaries offer communications, technology, information, and entertainment products and services worldwide to consumers, businesses, and governmental entities. Its segments are Consumer and Business.
On August 15, 2022, VZ and Hi-Rez announced their agreement to enhance the experience of mobile games with VZ’s 5G Ultra-Wideband. This will be available in Hi-Rez’s new game, Rogue Company Elite, and diversifies VZ’s portfolio.
VZ’s operating revenues came in at $33.79 billion for the second quarter that ended June 30, 2022, up marginally year-over-year. Moreover, its wireless equipment revenues came in at $6.67 billion, up 20.4% year-over-year. Also, its total assets came in at $370.15 billion for the period ended June 30, 2022, compared to $366.60 billion for the period ended December 31, 2021.
VZ’s revenue is expected to increase 2.1% year-over-year to $136.43 billion in 2022. Its EPS is expected to increase 3.4% per annum for the next five years. It surpassed EPS estimates in three out of four trailing quarters. VZ’s shares have lost marginally intraday to close the last trading session at $41.30.
VZ’s strong fundamentals are reflected in its POWR Ratings. The POWR Ratings assess stocks by 118 different factors, each with its own weighting.
VZ has a B grade for Stability. In the Telecom - Domestic industry, it is ranked #5 out of 20 stocks. Click here to see the additional POWR Ratings for Momentum, Growth, Sentiment, Value, and Quality for VZ.
AT&T Inc. (T)
T provides telecommunications, media, and technical services worldwide. The company operates through Communications; WarnerMedia; and Latin America segments. Its key market focus areas are 5G, AT&T Fiber and HBO Max.
On August 30, 2022, T announced plans to expand its award-winning fiber internet service to bring reliable and high-speed broadband to Arizona. John Stankey, T’s CEO, said, “Our long-term goal is to provide fiber to as many customers as we can, and this is just one of many steps we’re taking to achieve that goal.”
On August 4, 2022, T and Warner Bros. Discovery, Inc. (WBD) announced an agreement, permitting T to continue providing internet and mobility customers access to HBO Max’s profile of original programming and series. This partnership will ensure and retain continued quality viewership.
T’s equipment revenues came in at $5.38 billion for the second quarter ended 2022, up 5.6% year-over-year. Moreover, its net income came in at $4.11 billion, up 171.1% year-over-year. Also, its EPS came in at $0.56, up 154.5% year-over-year.
T’s surpassed EPS estimates in all four trailing quarters. T’s shares have lost marginally intraday to close the last trading session at $17.19.
T has an overall B rating, equating to a Buy in our POWR Ratings system. It has a B grade for Value. It is ranked #3 in the same industry.
Beyond what is stated above, we’ve also rated T for Sentiment, Stability, Quality, Momentum, and Growth. Get all T ratings here.
Lumen Technologies, Inc. (LUMN)
LUMN, a facilities-based technology & communications company, provides various integrated services & solutions. Its five segments are- International and Global Accounts Management; Enterprise; Small & Medium Business; Wholesale; and Consumer.
On August 30, 2022, LUMN announced the launch of Lumen SASE Solutions – a first-of-its-kind, all-digital experience for enterprise SASE’s purchase, configuration, and management. This product aims to offer high-quality performance to users on all devices and from any location.
LUMN’S total operating expenses came in at $3.70 billion for the second quarter ended June 30, down 5.6% year-over-year. Also, its total current liabilities were $5.78 billion for the period ended June 30, 2022, compared to $7.17 billion for the period ended December 31, 2021.
LUMN’s shares have lost marginally intraday to close the last trading session at $9.85.
LUMN’s strong fundamentals are reflected in its POWR Ratings. The stock has an overall B rating, equating to a Buy in our proprietary rating system. It has an A grade for Value and a B for Quality. It is ranked #4 in the same industry.
We have also rated LUMN for Sentiment, Stability, Momentum, and Growth. Get all LUMN ratings here.
VZ shares were trading at $41.36 per share on Tuesday afternoon, up $0.06 (+0.15%). Year-to-date, VZ has declined -17.43%, versus a -16.99% rise in the benchmark S&P 500 index during the same period.
About the Author: Riddhima Chakraborty
Riddhima is a financial journalist with a passion for analyzing financial instruments. With a master's degree in economics, she helps investors make informed investment decisions through her insightful commentaries.
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