Communication Services: The Race to 5G Wireless Is On, at Least for Some
We continue to see value in communication services, even if the industry isn't delivering meaningful growth.
Stocks across the global telecom industry have generally struggled recently even as market valuations in the U.S. have surged higher. In some cases, this pain has been self-inflicted, with investors taking a dim view of large-scale acquisitions, especially deals that push firms outside of their core telecom businesses. Rising U.S. interest rates have likely hurt valuations more broadly given the high yields many telecom stocks offer, as conventional wisdom holds that higher rates are a negative for dividend-paying stocks. Lastly, the industry isn’t delivering meaningful growth. Most telecom markets today are at or quickly nearing maturity, meaning that even a low-key price war in a given market can easily send revenue lower. The stark contrast between telecom growth and that of the technology firms whose operations rely on telecom networks almost certainly accounts for the relative stock performances of the two groups, especially in this market environment.
Michael Hodel does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.
Transparency is how we protect the integrity of our work and keep empowering investors to achieve their goals and dreams. And we have unwavering standards for how we keep that integrity intact, from our research and data to our policies on content and your personal data.
We’d like to share more about how we work and what drives our day-to-day business.
We sell different types of products and services to both investment professionals and individual investors. These products and services are usually sold through license agreements or subscriptions. Our investment management business generates asset-based fees, which are calculated as a percentage of assets under management. We also sell both admissions and sponsorship packages for our investment conferences and advertising on our websites and newsletters.
How we use your information depends on the product and service that you use and your relationship with us. We may use it to:
To learn more about how we handle and protect your data, visit our privacy center.
Maintaining independence and editorial freedom is essential to our mission of empowering investor success. We provide a platform for our authors to report on investments fairly, accurately, and from the investor’s point of view. We also respect individual opinions––they represent the unvarnished thinking of our people and exacting analysis of our research processes. Our authors can publish views that we may or may not agree with, but they show their work, distinguish facts from opinions, and make sure their analysis is clear and in no way misleading or deceptive.
To further protect the integrity of our editorial content, we keep a strict separation between our sales teams and authors to remove any pressure or influence on our analyses and research.
Read our editorial policy to learn more about our process.