It’s no surprise that streaming companies have been doing well for the past several months. The coronavirus has all but shut down in-person forms of entertainment. This has caused most consumers to gravitate toward streaming services in the comfort and safety of their own home.
But the coronavirus only accelerated an already growing trend: consumers are moving away from cable TV packages and opting for streaming services instead.
This is why these streaming stocks will be big hits in the coming years:
These companies are battling to win over the hearts and minds of content viewers around the globe. The companies that win this battle will be sure to line your pockets with solid investment returns for years to come.
Streaming Stocks: Netflix (NFLX)
Netflix is the king of streaming services. It is so ubiquitous that the company has spawned its own subculture, to the point where it is used in everyday lingo (see: “Netflix and chill”) by younger generations. Even with increased competition, Netflix is still the major player in town, with over 180 million subscribers generating $20 billion in annual revenue.
This is thanks in large part to the company’s foresight to being the first streaming service to provide high-quality, original content for its users. At the same time, Netflix has leveraged its licensing agreements with large studios to provide a wide array of content for anyone to enjoy.
The company has been able to maintain slightly higher margins than many of its competitors due to its singular focus on streaming content, but is still only a fraction of the size of these companies as well.
Disney has been an original content giant for decades. So it came as no surprise in late 2018 when the company announced it would be coming out with its own streaming service, Disney+, to rival those of Netflix and Amazon.
Disney+ has thousands of hours of original Disney content, from major motion pictures to television shows and even original Disney Channel movies. The company has already surpassed 50 million subscribers in just a few short years, and is a big hit with families.
While Disney’s stock hasn’t performed particularly well over the past year, there have been rumors that Apple could make a play to buy Disney outright, and take Disney+ under the Apple umbrella. The poosibility of this alone is enough to get Disney shareholders excited for the future.
It’s no surprise that “The Everything Store” is in the business of streaming content. In fact, Amazon is taking streaming content even further than its competitors, securing the rights to live stream NFL and Premier League sporting events, and in turn, securing a large swath of sports fans throughout the globe.
According to one study, Amazon Prime gives customers more bang for their buck than any other service, making it the best value for customers, and more likely for future growth. Customers receive 247 TV shows per dollar spent on Amazon, compared to 149 TV shows per dollar on Netflix.
The issue with purchasing Amazon stock because of its streaming service is that you get the entire company along with it. And while Amazon has been a behemoth of a company, it is going up against antitrust allegations and a deteriorating relationship with the general public.
AT&T is the lone streaming service on the list that is also a traditional cable provider. The company has recognized the allure of streaming services. As a result, it tailored packages directly to streaming consumers in hopes of overtaking its competitors in the market. Because the company owns WarnerMedia, AT&T has a large studio at its disposal to churn out high-quality content.
Recently, AT&T partnered with HBO to bring HBO Max to its platform. At the same
Much like Amazon, AT&T has other business segments that support its stock price. First and foremost, the company operates as a telecom provider, and is benefiting from the staged rollout of 5G technology.
And, unlike its competitors, AT&T is valued much more reasonably than the big names on this list, with a forward price-earnings ratio of 9.4.
As of this writing, Dan Pelberg did not hold a position in any of the aforementioned securities.