3 Telecom Stocks Offering Stable Dividends and Growth

Thanks to constant demand, the telecommunications industry has long been a haven for stable investments. The industry is evolving as telecom companies expand their fiber networks to support 5G wireless standards. With this changing ecosystem, customers are expected to experience significant improvements in coverage and speed.

Given this positive sentiment, investors looking for both stability and modest growth may want to consider three telecom stocks, T-Mobile US, Inc. (TMUS), AT&T Inc. (T) and Verizon Communications Inc. (VZ).

Moreover, with a second Trump administration, it is likely that the telecommunications industry will face difficulties. less regulation, which will cost less money to comply withwhich has a positive impact on the industry.

However Broadband Equity, Access and Deployment (BEAD) Program provides $42.45 billion to expand high-speed Internet access by funding planning, infrastructure deployment, and implementation programs in all 50 states. This program is expected to bring several successful years to the entire broadband construction industry.

Many telecommunications companies are expanding beyond traditional services into the media, cloud and Internet of Things sectors. According to PwC reportThe US economy is expected to grow by $15 billion by 2030 due to the use of 5G applications in industrial production.

Looking ahead, the future prospects of the telecom sector appear promising, with the global 5G infrastructure market projected to reach US$590.18 billion by 2032, demonstrating Average annual growth rate 42.7%and global connectivity is projected to reach 7.9 billion by 2028based on innovation and collaboration.

With these favorable market trends in mind, let’s take a look at the fundamentals of the three largest companies. Telecommunications – Domestic promotions starting from the third option.

Stock #3: T-Mobile USA, Inc. (TMUS)

TMUS is a provider of mobile communications services, including voice, messaging and data, under its flagship brands T-Mobile and Metro by T-Mobile. It offers mobile phone services primarily using its 4G Long Term Evolution (LTE) network and its 5G technology network.

On October 8, TMUS announced the release of 5G on Demand, an end-to-end portable solution for private network and 5G services that includes network setup, teardown, and management. This new solution will help reduce costs and increase operational efficiency and flexibility. This should also help TMUS become a leader in the communications industry as it meets the growing needs of its customers.

On September 18, demonstrating its commitment to returning value to shareholders, the company announced its quarterly earnings report. dividends TMUS pays an annual dividend of $3.52, which equates to a yield of 1.51% at the current share price. The four-year average dividend yield is 0.21%.

For the third quarter of 2024, which ended September 30, TMUS’ total revenue increased 4.7% year-over-year to $20.16 billion, and postpaid revenue increased 8.3% year-over-year. year to $13.31 billion.

The company’s adjusted EBITDA for the quarter was $8.24 billion, up 8.5% year-over-year. The company’s net income was $3.06 billion, up 42.8% year-over-year, and earnings per share rose 43.4% year-over-year to $2.61. Additionally, TMUS’s adjusted free cash flow increased 29% year-over-year to $5.16 billion.

Based on this quarter’s performance, the company updated its 2024 guidance. TMUS expects full-year core adjusted EBITDA to be in the range of $31.60 billion to $31.80 billion. It also forecast adjusted free cash flow of $16.70 billion to $17 billion and net billable customer growth of $5.6 million to $5.8 million.

The fiscal fourth quarter (ending December 2024) revenue consensus estimate of $21.40 billion represents an increase of 4.5% year-over-year. The consensus earnings per share estimate of $2.30 for the current quarter indicates an improvement of 25.8% year-over-year. The company has an impressive history of windfall earnings; it topped consensus revenue and earnings per share estimates in three of the last four quarters.

Moreover, TMUS’s EBIT grew at a CAGR of 20.4% and 23% over the last three and five years, respectively. Additionally, its diluted earnings per share grew 48.8% on average over the last three years.

The stock has gained 59.4% over the past year, ending the last trading session at $235.47.

TMUS’ Power ratings reflect this common sense point of view. The stock has an overall rating of B, which equates to Buy in our proprietary rating system. POWR Ratings are calculated using 118 different factors, each with optimal weighting.

TMUS is rated B for Growth, Stability, Sentiment and Quality. The company ranks 6th out of 20 stocks in the ranking. Telecommunications – Domestic industry. Click here to see additional TMUS (Value and Momentum) rankings.

Stock #2: AT&T Inc. (T)

T is a leading global provider of telecommunications, media and technology services, operating in two segments: Communications and Latin America. It provides wireless and wireline communications services to consumers and businesses around the world.

On November 1, the company paid a quarterly dividend of $0.2775 per share. T pays an annual dividend of $1.11 per share, which translates to a yield of 4.88% from the prevailing share price. Additionally, the four-year average dividend yield is 6.35%.

On September 9, T expanded its high-speed fiber internet to new territories, reaching more people. This expansion will continue through joint ventures and other open access commercial agreements to expand Gigapower’s fiber network into new locations.

T’s services operating revenues for the third quarter (ended September 30, 2024) increased modestly year-over-year to $25.13 billion. Net income was $145 million and adjusted earnings per share were $0.60. Additionally, the company reported adjusted EBITDA of $11.60 billion, indicating growth of 3.4% compared to the prior-year quarter.

Looking ahead, capital expenditures and free cash flow will be in the range of $21–22 billion and $17–18 billion, respectively. The company also forecast adjusted earnings per share to fall between $2.15 and $2.25.

Analysts expect T’s revenue and earnings per share for the current year (ending December 2024) to be $122.19 billion and $2.21, respectively. For fiscal 2025, revenue and earnings per share are expected to grow 1.4% and 2.4% year over year to $123.89 billion and $2.27, respectively.

T’s net income has grown at an average rate of 98.7% over the past three years. Likewise, the company’s diluted earnings per share have grown at an average rate of 110.4% over the past three years.

T shares are up 43.6% over the past year and 34.5% over the past nine months, ending the last trading session at $22.83.

T’s bright future is reflected in its POWR Ratings. The stock has an overall rating of B, which is a Buy in our proprietary rating system.

He also has a B grade for height. Within the same Telecommunications – a domestic industry, ranks 5th. Click here to see T’s ratings for value, momentum, stability, sentiment and quality.

Stock #1: Verizon Communications Inc. (VZ)

VZ provides consumers, businesses and government agencies with communications, information and entertainment products and services. It operates through two segments, Verizon Consumer Group and Verizon Business Group, providing wireless and wireline communications services and products in the United States.

On November 1, thanks to strong financial performance, the company paid a quarterly dividend, which increased by 1.25 cents to $0.6775 per share.

VZ has raised its annual dividend for 18 consecutive years. The company pays an annual dividend of $2.71, which equates to a yield of 6.46% at the current share price. The four-year average dividend yield is 5.90%. What’s more, the company’s dividend payout has grown at an impressive CAGR of 2% over the past five years.

On September 30, VZ and Vertical Bridge entered into an agreement under Vertical Bridge to obtain exclusive rights to lease, operate and manage 6,339 wireless communications towers in all 50 states from VZ for $3.3 billion, with $2.8 billion in cash upfront. This deal will save VZ costs and create greater diversity of suppliers in the market.

In the fiscal third quarter ended September 30, 2024, VZ’s services and other services revenues increased modestly year-over-year to $27.99 billion. The company’s consolidated adjusted EBITDA was $12.49 billion, up 2.1% year over year, and earnings per share were $0.78. Additionally, the total number of broadband subscribers stood at 11.9 million, representing an increase of nearly 16% year-on-year.

According to VZ’s fiscal 2024 forecasts and guidance, adjusted EBITDA is forecast to grow between 1% and 3%. Additionally, adjusted EPS guidance ranges from $4.50 to $4.70. The company also expects overall wireless revenue growth to be between 2% and 3.5%.

The Street expects VZ’s fiscal fourth quarter (ending December 2024) revenue to increase modestly year-over-year to $35.44 billion. Earnings per share for the same period are expected to rise 2.9% year over year to $1.11. Additionally, the company has topped consensus EPS estimates in three of the last four quarters, which is promising.

Over the past three and five years, VZ’s total assets have grown at a CAGR of 2.6% and 6%, respectively.

The stock is up 16.5% over the past year and 5.4% over the past nine months, ending the last trading session at $42.22.

Unsurprisingly, VZ has an overall rating of B, which equates to a Buy in our POWR rating system. It has a B grade for growth and stability. Out of 20 stocks in the same industry, VZ ranks #3.

In addition to the above, we also rated VZ on value, dynamics, sentiment and quality. Get all VZ ratings Here.

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TMUS stock was trading at $236.83 per share Thursday afternoon, up $1.36 (+0.58%). Year to date, TMUS has gained 49.35%, compared with the benchmark S&P 500 index’s gain of 26.07% over the same period.

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