Finding Value In The Communication Sector Is Easy Today – Finding Growth Is A Different Matter

As it relates to this article, this is important because the research candidates presented in this article are not expected to produce a lot of growth. Therefore, the primary allure of most of these 5 research candidates is above-average dividend income. However, dividend growth is either inconsistent, low or in some cases both. Stated succinctly, I am not very fond of investing in the Communications Sector. However, I do hold small positions in Verizon and AT&T. In both cases, I see them as higher-yielding alternatives to sitting in cash, or I am simply using them to beef up the yields in retirement portfolios.

Finally, even though I do not expect a lot of growth from either AT&T or Verizon, I do consider both significantly undervalued. Consequently, both candidates could produce exceptional short to intermediate term capital appreciation as a result of P/E ratio expansion. In other words, with their stock price reverting to a mean valuation over the next year or two. But most importantly, it should be clear that I’ve not deluded myself into believing that either of these companies can ever make me rich. Instead, I hope they continue to pay me an above-average dividend while I wait and look for better opportunities to manifest. Sometimes, those are reasons enough to temporarily own stock, at least in my humble opinion.

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Disclosure: Long VZ, T.

Disclaimer: The opinions in this document are for informational and educational purposes only and should not be construed as a recommendation to buy or sell the ...

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