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The Communication Services and the Information Technology sectors have significantly evolved in recent years. More specifically, Telecoms and Semiconductors have faced many challenges. What are the pros and cons of these industries? Which companies should investors dive into? What can they bring to their portfolios? Let’s hit chips and chatter!

You’ll Learn

• Telecoms are part of the communication services sector, which has been dramatically transformed in recent years with big players such as Google and Disney. What else should investors know about this sector?
• The Telecom industry is capital-intensive and enjoys predictable cash flow. What other main characteristics does it have?
• On the other hand, debt can be a big struggle for them. Mike explains to what extent debt remains acceptable.
• There’s a big difference between Canadian and American telecoms, mainly explained by the oligopoly they benefit from in Canada.
• Would the oligopoly explain why Telus (T.TO) and BCE remain Mike’s favorites?
• We couldn’t do this episode without a few words about some US telecoms: Comcast (CMCSA), Verizon (VZ), and the good old (or not so good old) AT&T (T). What are Mike’s thoughts on them?
• Let’s move to the semiconductors, part of the Information Technology sector, which has significantly changed in the last decade to the point that it impacts the entire US market.
• We all remember the 2020 chip shortage, greatly affecting the semiconductor industry. What else is there to know about this subsector?
• When are semiconductor companies more prone to perform well, and when are they more at risk?
• Unlike Telecoms, the semiconductors we will discuss today are all on the US market. Among the ones with the best ratings at Dividend Stocks Rock (DSR), we can find Taiwan Semiconductor (TSM), Texas Instruments (TXN), Broadcom (AVGO), and Qualcomm (QCOM). What is there to like about them?
• Intel (INTC) and Nvidia (NVDA) are also well-known companies in the semiconductor subsector. However, they have a weaker rating at DSR with a 2 for Dividend Safety. What could explain that?
• We couldn’t end the episode without a few thoughts on semiconductor equipment businesses such as Lam Research (LRCX), KLA Corp (KLAC), and ASML. Mike explains more about them.

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