3 High-Yield Telecom Stocks Outperforming The S&P 500 In 2021

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The demand for telecommunication services increased amid the COVID-19 pandemic as most companies adopted remote working structures. Investors’ interest in telecom stocks has remained high this year, as is evidenced by the SPDR S&P Telecom ETF (XTL) and the iShares U.S. Telecommunications ETF’s (IYZ) 15.6% and 11.4% respective gains year-to-date.

Furthermore, the telecom industry is expected to continue growing as the 5G rollout accelerates. According to a Research and Market report, the global telecom market is expected to grow at a 6% CAGR  between 2021 – 2025.

Therefore, we think it could be wise to add high-yield telecom stocks BCE Inc. (BCE), Telefónica, S.A. (TEF), and Lumen Technologies, Inc. (LUMN) to one’s portfolio. These three stocks have also outperformed the S&P 500’s 18.1% returns so far this year.

BCE Inc. (BCE)

Headquartered in Verdun, Canada, BCE is a telecommunications and media company that provides wireless, wireline, Internet, and television services to residential, business, and wholesale customers. The company operates through three segments: Bell Wireless; Bell Wireline; and Bell Media.

On September 14, BCE expanded its pure fiber Internet access to 54,000 locations in Oshawa. Rizwan Jamal, the President of Bell Residential and Small Business, said, “Bridging the digital divide is a priority for Bell as we advance how Canadians connect with each other and the world.”

For the second quarter, ended June 30, 2021, BCE’s operating revenue increased 6.4% year-over-year to $5.7 billion. The company’s adjusted net earnings came in at $751 million, representing a 31.1% year-over-year rise. Also, its adjusted EBITDA was $2.48 billion, up 6.2% year-over-year. The EPS came in at $0.83, up 31.7% year-over-year.

BCE’s revenue is expected to total  $18.81 billion next year, representing a 5.4% year-over-year rise. In addition, the company’s EPS is expected to increase 7.3% year-over-year to $2.53 in the current year. The stock has gained 18.5% in price year-to-date to close Friday’s trading session at $50.73.

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