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Communication Services: We Like the Unloved

Traditional telecom has lagged, but the rest of the sector has been strong.

Michael Hodel
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The Morningstar U.S. Communications Services Index (Exhibit 1) continues to perform well amid broader market volatility. The sector consists of four major types of companies: traditional phone companies, cable companies, wireless carriers, and infrastructure firms. Traditional phone companies AT&T and Verizon dominate the index. Verizon shares have stagnated this year after a fantastic run in 2018, while AT&T has roughly kept pace with the market, bouncing back from a rough sell-off after the Time Warner merger. We believe AT&T shares have more room to run.


In choppy markets, telecom generally offers a smoother ride - source: Morningstar Analysts

Michael Hodel does not own (actual or beneficial) shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.

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