Telecommunication companies have transformed the way we communicate, work, and live in a world full of technology. During the pandemic and the global and local lockdowns, all of us used the phone, the internet, and television services to communicate, work, and get entertainment while staying at home.
The telecommunication companies often make a lot of capital expenditures to keep up with competition and trade at attractive valuations. The three telecom stocks in this article have very attractive valuations, strong fundamentals, and good growth. Additionally, they are at price levels that make their rebound likely.
Here are the three best telecom stocks to buy in July:
|DISH||Dish Network Corporation||$17.56|
|LUMN||Lumen Technologies, Inc.||$10.85|
|FYBR||Frontier Communications Parent, Inc.||$25.04|
Best Telecom Stocks: DISH Network Corporation (DISH)
DISH Network Corporation (NASDAQ:DISH) provides paid TV services in two main segments: Pay-TV and Wireless. The stock has losses of nearly 44% in 2022, presenting a top investment opportunity now.
DISH Network Corporation is both a mature and growing company, combining the best of both worlds. It has two consecutive years of increasing sales growth and it knows how to turn these sales into what matters: nice and consistent growing profits. In 2021, net income increased 36.76% to $2.41 billion and even though the first quarter of 2022 showed a quarter-over-quarter decline in sales and net income, the firm has a solid track record of positive free cash flow.
In terms of valuation, the shares trade at a forward price-to-book (P/B) ratio of 0.56X. Interestingly, its forward price-t0-sales (P.S) ratio is also 0.56X.
The price-to-earnings (P/E) ratio of 5.18 is very low, but the potential upside is very high as the one-year target is $41.29, which would represent a nice gain of 128%.
Lumen Technologies (LUMN)
Lumen Technologies (NYSE:LUMN) is powering the fourth industrial revolution with products for communications, such as calling services, edge computing, networking, security, hybrid IT, and cloud connectivity.
In Q1 2022, the financial results were mixed with a beat on earning per share (EPS) and a miss on revenue. The company reported EPS GAAP of 63 cents, a beat by 18 cents and revenue of $4.68 billion, a miss by negative $5.54 million. The firm has beat EPS estimates in the past three out of four quarters, which is very bullish.
The stock trades at a P/E ratio of 5.3 and has a very nice forward dividend yield of 9.03%.
The valuation of the LUMN stock is very attractive now as it trades at a forward P/S ratio of 0.64X and at a forward P/B ratio of 0.87X.
Best Telecom Stocks: Frontier Communications Parent (FYBR)
Frontier Communications Parent (NASDAQ:FYBR) provides fast fiber-optic internet, phone and video services. The company aims to make your internet experience better.
FYBR stock has declined approximately 16% year-to-date. The Q1 2022 earnings report was mixed, but mostly positive. The EPS GAAP of 26 cents was a beat by 3 cents and the revenue of $1.45 billion was a marginal miss by negative $5.27 million.
In 2021, the firm had massive net income growth of 1,332.59% to 4.96 billion. The free cash flow generation is strong and positive. Additionally, the valuation is very appealing now.
The P/S ratio of 0.92X signals a cheap stock. The firm has very strong profitability measures, with a gross profit margin of 62.88% and a net income margin of 80.23%.
The P.E ratio of 1.16 is very low and the one-year target is $40, which represents potential upside of 66%.
On the date of publication, Stavros Georgiadis, CFA 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.