Investing in Communication Stocks

Best communications stocks in 2026

Here are five of the better stocks that are communicating with investors.

1. T-Mobile

4. Alphabet

Why invest in communication services stocks?

The need for communication companies is only growing as we become increasingly distant. 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. As communication needs grow, investors can find opportunities in the sector to produce excellent returns, no matter how they like to invest.

There are risks in the communications sector, though. Communications industries are constantly disrupted as technology innovations and new products come to market. If you're not following the industry, you may find your communications stock producing worse-than-expected results. Additionally, most of the industry is highly regulated. Changes in regulation can negatively impact individual companies or entire sectors.

The key to successfully investing in communications stocks 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.

How to invest in communication stocks?

Investing in communication stocks is simple. The following steps will walk you through it.

1. Open your brokerage app: Log in to your brokerage account where you handle your investments.
2. Search for the stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
3. Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
4. Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
5. Submit your order: Confirm the details and submit your buy order.
6. Review your purchase: Check your portfolio to ensure your order was filled as expected and adjust your investment strategy accordingly

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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