In this article, we will be taking a look at 10 communication services stocks that pay dividends. To skip our detailed analysis of communication services stocks, you can go directly to see the 5 Communication Services Stocks that Pay Dividends.
With the pandemic-induced e-commerce surge and the rise of the new normal in the form of online shopping, online platforms, digital advertising, and the communication services sector at large has begun going through rapid and unprecedented transformations. Initially, during early 2020, digital advertising spending and revenue dropped with countries looking to contain the virus, and companies looking for any way to cut expenses for themselves. However, this dynamic did not last long as the pandemic dragged on and businesses rebounded with a digital focus, making up for all the losses the communication services sector sustained in 2020. As such, communication services stocks such as Verizon Communications Inc. (NYSE: VZ), AT&T Inc. (NYSE: T), Comcast Corporation (NASDAQ: CMCSA), and Vodafone Group Plc (NASDAQ: VOD) have managed to rebound just as well come 2021.
According to a Fidelity report, the above claim can be substantiated by looking at consumer behavior during the pandemic. As more people were socially distancing at home, the pull towards online shopping and the virtual experience grew unprecedentedly. Alongside this development, it was estimated that digital advertising also began recovering and surpassing 2020 levels. The report has also mentioned that as compared to the world's GDP, the US and international revenue for advertisements began growing much faster, as digital spending grew by 15-20% in the past five years, as of 2020. During the pandemic alone, online shopping on its own also delivered an annualized growth rate of about 35%, introduced newer avenues and growth opportunities for the communication services sector as well.
Finally, as far as investor sentiment on the communication services sector is concerned, 25% of S&P 500 communication services sector stocks have received Buy ratings after 2020. Additionally, the sector is performing positively in 2021 as well, having yielded returns of 40.93% in the past year according to S&P Global. Finally, according to a Communication Services Sector Report published this February by UCLIS Markets Insights, as of February 2021, the S&P 500 Communications Services Select Sector Index managed to return about 23.22% year to date, as compared to the S&P 500's 14.4% return. The report has also mentioned that this sector, in particular, has an edge in light of the fact that its constituents include growth and value companies combining the growth benefit of traditional technology stocks with the ability of these stocks to pay higher dividends and provide stable cash flows, all accumulating to provide investors with an attractive investment prospect.
Just like the communication services industry, the entire hedge fund industry is still feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and July 2021, our monthly newsletter’s stock picks returned 186.1%, vs. 100.1% for the SPY. Our stock picks outperformed the market by more than 124 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Without further ado, let's look at 10 communication services stocks that pay dividends.
Our Methodology
Using Insider Monkey's data on 866 hedge funds, we have selected small-cap Russell 2000 Index communication services stocks that are among the most popular with hedge funds today. We have mentioned the dividend yields and hedge fund holders for each stock in our list below, with the yields going as far up as 7%. The stocks also have mostly positive analysts' ratings and strong fundamentals demonstrating core business strengths.
Number of Hedge Fund Holders: 12Dividend Yield: 1.4%
Entravision Communications Corporation (NYSE: EVC), a media, marketing, and technology company operating across the globe, is ranked 10th on our list of communication services stocks that pay dividends. The company operates through its Television, Radio, and Digital segments and primarily engages the Hispanic community across acculturation levels and media channels.
This June, Entravision Communications Corporation (NYSE: EVC) announced its acquisition agreement to take over MediaDonuts, a company known for its digital marketing and branding.
In the second quarter of 2021, Entravision Communications Corporation (NYSE: EVC) had an EPS of $0.09, beating estimates by $0.01. The company’s revenue was $178.41 million, up 295.45% year over year and beating estimates by $15.31 million. Entravision Communications Corporation (NYSE: EVC) has gained 111.56% in the past 6 months and 159.57% year to date.
By the end of the first quarter of 2021, 12 hedge funds out of the 866 tracked by Insider Monkey held stakes in Entravision Communications Corporation (NYSE: EVC) worth roughly $21.8 million. This is compared to 11 hedge funds in the previous quarter with a total stake value of approximately $25.9 million.
Like Verizon Communications Inc. (NYSE: VZ), AT&T Inc. (NYSE: T), Comcast Corporation (NASDAQ: CMCSA), and Vodafone Group Plc (NASDAQ: VOD), Entravision Communications Corporation (NYSE: EVC) is a good stock to invest in.
Number of Hedge Fund Holders: 6Dividend Yield: 1.5%
ATN International, Inc. (NASDAQ: ATNI) is a provider of telecommunications services in the US, the Caribbean, and Bermuda, through its subsidiaries. The company operates through its International Telecom, US Telecom, and Renewable Energy segments, and ranks 9th on our list of communication services stocks that pay dividends.
Raymond James' Ric Prentiss holds an Outperform rating on shares of ATN International, Inc. (NASDAQ: ATNI), alongside a $52 price target.
In the second quarter of 2021, ATN International, Inc. (NASDAQ: ATNI) had an EPS of $0.13, beating estimates by $0.09. The company’s revenue was $123.86 million, up 13.54% year over year but missing estimates by $0.45 million. ATN International, Inc. (NASDAQ: ATNI) has gained 2.15% year to date.
By the end of the first quarter of 2021, 6 hedge funds out of the 866 tracked by Insider Monkey held stakes in ATN International, Inc. (NASDAQ: ATNI) worth roughly $46.8 million. This is compared to 8 hedge funds in the previous quarter with a total stake value of approximately $38.8 million.
Like Verizon Communications Inc. (NYSE: VZ), AT&T Inc. (NYSE: T), Comcast Corporation (NASDAQ: CMCSA), and Vodafone Group Plc (NASDAQ: VOD), ATN International, Inc. (NASDAQ: ATNI) is a good stock to invest in.
Number of Hedge Fund Holders: 20Dividend Yield: 1.7%
TEGNA Inc. (NYSE: TGNA), an American media company, is next on our list of communication services stocks that pay dividends and ranks 8th. The company owns and manages television stations delivering television programming and digital content, and offers this content and information to consumers online, on social platforms, and elsewhere.
Barrington analyst James Goss raised his price target on shares of TEGNA Inc. (NYSE: TGNA) this January from $18 to $20. The analyst also reiterated an Outperform rating on the stock at the same time.
In the second quarter of 2021, TEGNA Inc. (NYSE: TGNA) had an EPS of $0.50, in line with estimates. The company’s revenue was $732.91 million, up 26.88% year over year and beating estimates by $3.16 million. TEGNA Inc. (NYSE: TGNA) has gained 25.55% year to date and 42.60% in the past year.
By the end of the first quarter of 2021, 20 hedge funds out of the 866 tracked by Insider Monkey held stakes in TEGNA Inc. (NYSE: TGNA) worth roughly $334 million. This is compared to 34 hedge funds in the previous quarter with a total stake value of approximately $286 million.
Like Verizon Communications Inc. (NYSE: VZ), AT&T Inc. (NYSE: T), Comcast Corporation (NASDAQ: CMCSA), and Vodafone Group Plc (NASDAQ: VOD), TEGNA Inc. (NYSE: TGNA) is a good stock to invest in.
Number of Hedge Fund Holders: 9Dividend Yield: 1.8%
Scholastic Corporation (NASDAQ: SCHL), a publisher and distributor of children's books across the globe, ranks 7th on our list of communication services stocks that pay dividends. The company operates through its Children's Book Publishing and Distribution, Education, and International segments.
In the fiscal second quarter of 2021, Scholastic Corporation (NASDAQ: SCHL) had an EPS of $1.02, beating the previous quarter's EPS of -$1.16. The company’s revenue was $406.20 million, beating the previous quarter's revenue as well, which had been $215.20 million. Scholastic Corporation (NASDAQ: SCHL) has gained 16.84% in the past 6 months and 36.64% year to date.
By the end of the first quarter of 2021, 9 hedge funds out of the 866 tracked by Insider Monkey held stakes in Scholastic Corporation (NASDAQ: SCHL) worth roughly $26.2 million. This is compared to 11 hedge funds in the previous quarter with a total stake value of approximately $38.4 million.
Like Verizon Communications Inc. (NYSE: VZ), AT&T Inc. (NYSE: T), Comcast Corporation (NASDAQ: CMCSA), and Vodafone Group Plc (NASDAQ: VOD), Scholastic Corporation (NASDAQ: SCHL) is a good stock to invest in.
Palm Valley Capital Management, an investment management firm, mentioned Scholastic Corporation (NASDAQ: SCHL) in its second-quarter 2021 investor letter. Here's what they said:
“We sold Scholastic (ticker: SCHL) after the share prices exceeded our intrinsic value estimates. The company was negatively impacted by the pandemic but is beginning to see light at the end of the tunnel.”
Number of Hedge Fund Holders: 15Dividend Yield: 1.9%
InterDigital, Inc. (NASDAQ: IDCC), a designer and developer of technology that allows and enhances wireless communications, ranks 6th on our list of communication services stocks that pay dividends. The company operates in the US and internationally. It works to provide technological solutions for digital cellular and wireless products and networks.
Roth Capital's Scott Searle holds a Buy rating on shares of InterDigital, Inc. (NASDAQ: IDCC) as of this August. Additionally, the analyst also has a $104 price target on the company's shares.
In the second quarter of 2021, InterDigital, Inc. (NASDAQ: IDCC) had an EPS of $0.05, beating estimates by $0.14. The company’s revenue was $87.73 million, beating estimates by $3.40 million. InterDigital, Inc. (NASDAQ: IDCC) has gained 8.76% in the past 6 months and 21.61% year to date.
By the end of the first quarter of 2021, 15 hedge funds out of the 866 tracked by Insider Monkey held stakes in InterDigital, Inc. (NASDAQ: IDCC) worth roughly $273 million. This is compared to 18 hedge funds in the previous quarter with a total stake value of approximately $314 million.
Like Verizon Communications Inc. (NYSE: VZ), AT&T Inc. (NYSE: T), Comcast Corporation (NASDAQ: CMCSA), and Vodafone Group Plc (NASDAQ: VOD), InterDigital, Inc. (NASDAQ: IDCC) is a good stock to invest in.
