Investing Topics: Telecom Stocks

What’s a well-run fiber broadband network worth these days?

The top two companies that dominate this essential service industry have combined market capitalization of $440 billion and annual revenue of $300 billion plus, but still trade for an average of just 10 times expected 2020 earnings. They clearly suffer from the burden of low expectations.

Chronic share underperformance, weak Q2 operating results and still-heavy debt raise the question - is it time to sell AT&T (NYSE: T)?

After a robust decade and a half following 1996 deregulation, large US telecom M&A had virtually evaporated. The exception: T-Mobile US’ (NSDQ: TMUS) merger with Sprint, which closed April 1, 2020.

It’s no surprise that both the US and China’s political rhetoric is ratcheting up as the US approaches November elections. COVID-19 recriminations are just the latest catalyst for worsening what were already tense relations. Nonetheless, I’m staying with three Chinese essential service stocks.

AT&T Inc’s (NYSE: T) Q1 results answer two key questions about COVID-19 fallout and the telecom giant's resiliency.

Around the world, people are staying home to combat the deadly spread of COVID-19. That’s catastrophic for certain industries but, as always in capitalism, there are also winners.

Coronavirus (COVID-19) isn’t finished inflicting pain and suffering, particularly on China, and the global economic cost is only beginning to be felt. But one Chinese industry seems to still be moving full-steam ahead.

Cable companies still enjoy success in the B2B market. But these results raise a critical question for the rest of US communications: Who are they taking commercial customers from?

5-G communications networks promise to unlock a whole host of previously unimaginable applications as they’re rolled out over the next several years, and telecoms around the world are claiming a “lead” over rivals in the race to deploy them.