Given the jitters that still cloud the equities sector this year, investors may want to consider adding telecom stocks to buy in their portfolio for general stability and potential upside opportunities. Primarily, when faced with a possible economic downturn, it’s often best to pivot your funds toward consistently relevant sectors. Few industries are as compelling as telecommunications under this context.
With the purchasing power of the dollar declining by double digits over the last two years, working households have little choice but to tighten their belts. But the telecom sector is one of the last that will suffer a budgetary skimping. Because connectivity is critical to professional success — and even a human right — in the modern realm, telecom stocks to buy represent a wise idea.
In addition, society has become almost fully ingrained in digitalization. According to data compiled by Statista.com, a survey conducted in February 2021 revealed that nearly half of respondents spend five to six hours on their phone daily — and this stat doesn’t include work-related smartphone usage.
Since demand only seems to be accelerating, investors should consider the below telecom stocks to buy in June.
|CCOI||Cogent Communications Holdings, Inc.||$60.57|
|AMT||American Tower Corporation||$266.15|
A multinational telecommunications conglomerate, Comcast (NASDAQ:CMCSA) on paper would seem a company that could rise above the muck, thanks to its diversified business.
Unfortunately, that hasn’t quite turned out to be the case with CMCSA stock down over 16% on a year-to-date basis. That’s just slightly less than the 17.9% decline for iShares U.S. Telecommunications ETF (BATS:IYZ), the 23-stock exchange-traded fund which has Comcast stock as its second-largest holding (14.47%).
Nevertheless, patient investors should consider it as one of the more interesting telecom stocks to buy in June.
For one thing, Comcast’s interest services are still a formidable player in the game. As well, certain consumer dynamics have evolved that may favor the company in the months and years ahead. With coronavirus restrictions fading, more people are interested in traveling and other experiential acquisitions despite the ravages of inflation. That bodes well for the company’s Universal Studios theme parks.
The other thing it’s got going for it is the full return of collegiate and professional sports, which may help shore up Comcast’s digital cable TV business. While streaming enjoys myriad benefits, it’s not the most effective method for watching sports. Therefore, Comcast could become surprisingly relevant.
Cogent Communications (CCOI)
One of the world’s largest internet service providers, Cogent Communications (NASDAQ:CCOI) has the distinction of operating an immensely large fiber-optic network. Better yet, it’s solely built for internet traffic, making Cogent an essential platform for enterprise-level clients and for small- and medium-sized businesses. As well, the company has a massive physical footprint, operating in 50 countries and 216 global markets.
What really makes Cogent intriguing as one of the telecom stocks to buy is its ability to undergird the next-generation workplace environment. Should telecommuting become a permanent fixture, Cogent will benefit from organic tailwinds. But if employees are recalled back to the office, the gig economy could burgeon as many who have grown accustomed to telecommuting privileges branch out on their own.
So far this year, CCOI stock is down 18%, but analysts tracked by Tipranks have price targets that are 18% above current levels, all with “strong buy” ratings on the shares.
Better yet, Cogent has proven to be a relatively stable company, consistently generating positive earnings and free cash flow. With a current dividend yield of nearly 6%, CCOI will almost surely attract investors seeking shelter from inflationary forces.
American Tower (AMT)
More of an infrastructure play rather than a direct investment among telecom stocks to buy, American Tower (NYSE:AMT) is structured as a real estate investment trust (REIT). Its specializes in owning, operating and developing physical spaces for wireless and broadcast communications. Per its website, AMT’s global portfolio includes approximately 221,000 communications sites.
With wireless carriers aggressively building out their 5G networks, American Tower is in prime position to profit since this initiative will require the development of new towers and equipment. To be sure, consolidation in the wireless arena may bring challenges to the infrastructure side of the business. However, it’s also possible that AMT could benefit from buyouts as smaller firms sell their assets.
AMT stock is down 8.6% year to date while Pacer Benchmark Data & Infrastructure Real Estate SCTR ETF (NYSEARCA:SRVR) is off 14.8%. That exchange-traded fund has American Tower shares as its biggest holding (17.6%) among its current 24-stock portfolio.
Still, combined with its decent 2.14% dividend yield, investors should look to American Tower for a steady and dependable ride.
On the date of publication, Josh Enomoto did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.