The communications sector is broadly defined these days, encompassing everything from century-old legacy media companies to internet stocks. A communication services stock is a share in a company that facilitates the distribution of information and entertainment on a one-to-many or one-to-one basis.
Information technology companies use computers and software to help businesses and individuals stay connected. Telecommunications companies provide the infrastructure and services for distributing information. Television broadcast networks, broadband internet, and mobile wireless networks are also parts of the communications sector.
As we grow increasingly connected (and physically apart), the ability to send and receive information over distances becomes increasingly important. The communications sector will continue to produce important and valuable companies.
Best communications stocks in 2025
Here are five of the better stocks that are communicating with investors.
1. T-Mobile
2. Comcast
NASDAQ: CMCSA
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3. Netflix
NASDAQ: NFLX
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Netflix (NFLX -1.70%) has grown to become one of the most important media companies in the world over the past 15 years. Originally a DVD rental service, it pivoted to streaming video in the late 2000s, distributing licensed content to its subscribers. Now the company spends almost $20 billion annually on both licensed and original content for more than 300 million global subscribers.
Netflix is a beneficiary of the shift from pay TV to streaming entertainment. As the market leader in the space, it has the capital to invest in more content than its competitors and take more risks with its budget. As a result, it produces some of the best and most popular shows on television.
The company cracked down on password sharing and introduced a new ad-supported tier in 2023. The combination led to strong subscriber growth and expanded Netflix's reach. The ad-supported tier opens the door for substantial increases in revenue per subscriber without having to raise prices for consumers.
4. Alphabet
5. Meta Platforms
NASDAQ: META
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Why invest in communication services stocks?
The need for communication companies is only growing as we become increasingly distanced. Not only are we more mobile than ever with the ability to quickly move from city to city around the world, but trends like remote work also rely heavily on communication capabilities for enterprises.
The sector is incredibly diverse. It ranges from growth stocks with the potential for market-beating returns to value stocks paying lofty dividend yields. There's something for almost any type of investor. The key, however, is making sure you buy companies with strong competitive advantages that they can maintain for the foreseeable future. As communication needs continue to expand, those companies are the ones that stand to benefit.
How to analyze communications stocks
The communications sector is broad and encompasses many different fields. It’s generally best to compare communications companies that mainly operate in the same industries or that are at similar stages of growth.
- Compare a company's user base to its competitors. Is it larger or growing faster?
- Use revenue per user to compare similar businesses as a signal of competitive moats.
- Dividend yield is an important factor to consider for many communications stocks.
- Investors should also pay attention to cash flow.
Each industry within communications has an area of spending that should produce significant returns over time.
- Telecommunications companies should produce strong returns on their capital expenditures.
- Information technology companies should produce strong returns on their research and development (R&D) spending.
- Media companies should produce strong returns on their content expenses.
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The communications sector is poised to grow
The amount of data moving over long distances is growing every year. Whether it’s a simple text message on a mobile device, a film streamed over the internet, or important classified business communications, internet connectivity and 5G networks will only increase in importance, along with platforms that deliver information. Buying strong companies across the communications sector should produce good returns for investors as this trend continues.
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