3 Telecom Stocks to Buy and Hold Forever: January 2024


  • These are a few telecom stocks that will bring long-term profits to investors.
  • AT&T (T): This leading telecommunications company recently reported earnings that greater insight into its future.
  • Telephone & Data Systems (TDS): This communication services provider will benefit once a buyer comes for United States Cellular (USM).
  • Verizon Communications (VZ): Another leader in the communication services space, VZ is still performing well in early 2024.
Buy and hold telecom companies - 3 Telecom Stocks to Buy and Hold Forever: January 2024

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Telecommunications stocks are an essential addition to any investor’s portfolio. These companies offer exposure to a growing industry that provides communication methods with a much more seamless customer experience.

Additionally, a large number of companies within the telecom sector offer investors solid dividend yields, which enable long-term growth among stocks that may be a cornerstone of one’s investment portfolio.

Below are a few communication services stocks that are influential within the industry. Investors interested in gaining greater exposure to the industry should consider adding these three stocks to their portfolios.

AT&T (T)

AT&T logo on wooden background
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AT&T (NYSE:T) is a communication services provider offering its customers wireless data capabilities and communication devices through its wide range of retail locations. Its services and products are under the brands Cricket and AT&T Prepaid, which are its cheaper data and communication phone services. AT&T, its flagship smartphone service, and AT&T Fiber provide internet services through fiber optic cables.

On Jan. 24, the company announced fourth-quarter and full-year 2023 earnings results. Its total revenue for the fourth quarter improved by 2%, and its operating activities profit rose by 10% compared to the fourth quarter of 2022. AT&T’s consumer wireline revenue rose by 4%, and its business wireline services segment dropped by 10% within the same period. AT&T experienced a drop in revenue among specific business segments because of lower customer demand for its legacy products and services.

AT&T experienced a drop in its share price following this earnings report due to a 2024 outlook that was lower than most investors anticipated.

Over the past year, its stock price has fallen by 13%, and AT&T offered mixed results within its full-year earnings. However, it provides a decent dividend yield of 6.46% annually. With increased subscriber growth and improving cash flow, it is a great choice for a stock to buy and hold for the future.

Telephone & Data Systems (TDS)

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Telephone & Data Systems (NYSE:TDS) offers communication services through Telecom TDS and USCellular. The products and services TDS provides include smartphones, consumer electronics, home internet, mobile hotspots, and tablets, among other electronic accessories.

Over this past year, its share price has risen 47%, mainly due to its announcement that United States Cellular (NYSE:USM) would look for other alternatives back in August. At the time, Telephone & Data Systems owned approximately 83% of USCellular, and, directly following this release, TDS’s stock more than doubled.

On Nov. 3, TDS reported earnings for the third quarter of 2023, which stated that its total revenue dropped slightly by 8%. Net income saw a decline of over 80% compared to the year before.

The possible sale of United States Cellular to several larger businesses, such as T-Mobile (NYSE:TMUS) and AT&T, with private equity firms in the mix. It leads to the future of Telephone & Data Systems up in the air because it owns the lion’s share of USCellular. But, if USM is sold, it would greatly reduce the debt burden on Data Systems, which could lead to improved financial performance, making it another buy-and-hold contender with investors.

Verizon (VZ)

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Verizon (NYSE:VZ) is a leading telecommunications services company that offers a wide range of products and services, including smartphones, tablets, and other consumer electronics, along with its broadband capabilities and phone plans for individuals, businesses, and government organizations.

On Jan. 23, Version Wireless reported earnings for the fourth quarter of 2023, stating that its total revenue remained practically unchanged from the year before. VZ reported a net income of $7 billion in Q4 2022; for Q4 2023, it was a net loss of $3 billion. Verizon also reported similar operating revenue for the fourth quarter of its business and consumer segments, which both saw an increase of 3%.

Over the past six months, Verizon’s stock price has risen by 21%. After its fourth-quarter earnings results were released, its share price increased by nearly 7%. Verizon offers a strong and reliable dividend yield of 6.44% annually.

AT&T and Verizon are very much alike regarding market capitalization, customer base, dividend yield, and products and services. Both recently released earnings for the full year of 2023, giving investors greater insight into the financial state of each company. And similar to AT&T, Verizon exceeded expectations on reported free cash flow.

Investors may be wrestling with which large-cap telecom company to buy and hold, but having equal exposure to both stocks may be a good idea to better take advantage of what the industry offers.

As of this writing, Noah Bolton did not hold (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.

Noah has about a year of freelance writing experience. He’s worked with Investopedia dealing with topics such as the stock market and financial news.

Article printed from InvestorPlace Media, https://investorplace.com/2024/01/3-telecom-stocks-to-buy-and-hold-forever-january-2024/.

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