There are three main types of stocks within today’s communications sector. Some companies get most of their revenue from advertising and are well-positioned to benefit from the ongoing rebound of the ad market. These companies include those undervalued communication stocks that we’ll discuss in this article.

However, these companies are growing rapidly and cyclically, so they are best suited for growth investors. Conversely, some companies that provide wireless telecom and internet services are characterized by slow, steady growth, high dividend yields, and extremely low valuations.

Those names should appeal to conservative, value investors. Finally, the legacy TV network owners are getting killed by cord-cutting and operating unprofitable streaming channels. Investors should, of course, avoid those names.

With that said, here are the three most undervalued communications stocks to buy.

Verizon (VZ)

Verizon (NYSE:VZ), of course, is in the value-stock portion of the communications-services sector. The shares have a minimal forward price-earnings ratio of 7.7 and a very high dividend yield of 7.4%.

But the company also appears to be developing a “growth kicker.” Specifically, its wireless services revenue climbed 3.9% last quarter versus the same period a year earlier. In contrast, its free cash flow for the first three quarters of 2023 exceeded its total free cash flow in all of 2022. Moreover, VZ added at least 400,000 net new broadband subscribers in Q3 “for the fourth quarter in a row,” its broadband subscriber customer base jumped 21% last quarter versus Q3 of 2022.

British bank Barclays reacted to the company’s Q3 results by upgrading the shares to “overweight” from “equal weight” and raising its price target on the shares to $38 from $37. All in all, it’s one of those undervalued communication stocks to consider.

Pinterest (PINS)

Analysts, on average, expect Pinterest’s (NYSE:PINS) earnings per share to surge to $1.30 in 2024 from 62 cents in 2022. Since the company’s EPS is expected to double in two years, its forward price-earnings ratio of 26.8 is far too low. That P/E ratio, after all, is not much above the S&P 500’s P/E ratio 25.

PINS is benefiting greatly from the U.S. ad renaissance as its sales climbed 11.5% last quarter versus a year earlier. At the same time, its net income, excluding certain items, soared 153% year-over-year to $193.3 million.

Also, its global monthly active users rose 8% year-over-year last quarter, giving it another positive catalyst that will help increase its top and bottom lines.

Further increasing my confidence in PINS stock, Saudi Arabia raised the number of shares it owned last quarter by 20% to 4.86 million.

Roku (ROKU)

The owner of America’s most popular streaming operating system by far, Roku (NASDAQ:ROKU) is unsurprisingly growing by leaps and bounds. I’m not surprised by this growth because the popularity of streaming continues to increase rapidly in America while the company is benefiting from the rebound of the digital advertising sector.

Last quarter, the company’s revenue jumped 20% versus the same period a year earlier, while it added a net total of 2.3 million active accounts between Q3 of 2022 and Q3 of 2023. Also importantly, Roku posted a positive EBITDA of $43.4 million last quarter, excluding certain items, compared with an EBITDA loss of $43.4 million in Q3 of 2022. This makes it one of those undervalued communication stocks to pay attention to.

“As the ad market rebounds, Roku is poised to expand profitably as a platform and free ad-supported TV channel leader,” investment bank Wedbush wrote in a note to investors following the company’s Q3 results.

ROKU stock is changing hands for just 3.3 times analysts’ average 2024 revenue estimates. That valuation is very low given the company’s robust growth, great potential, and meaningful, positive EBITDA. As a result, Roku is undoubtedly one of the most undervalued communications stocks to buy.

On the date of publication, Larry Ramer 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.