It is no surprise that the telecom sector has seen positive trends in the face of the COVID-19 pandemic. This can be attributed to remote work culture. The industry should continue to experience steady demand due to the continued growth of the hybrid work culture. However, the share of Verizon Communications The current valuation of (VZ), is significantly too high as the company might not be able capitalize on industry trends. Therefore, we think investors could instead bet on quality telecom companies AT&T (T), Lumen Technologies (LUMN), and Cogent Communications (CCOI). So, let’s examine these names.
Verizon Communications Inc., New York City, offers worldwide communications, technology and entertainment products. The company’s third quarter (end September 30, 2021) saw its total operating revenue rise 4.3% to $32.91 million. The company’s current assets totaled $40.28 Billion for the September 30th, 2021 period, which was $54.59 billion for December 31st, 2020. Its 0.41% ratio of trailing-12 month asset turnover is 10.7% less than the industry average of 0.46%.

The stock has declined 11.3% in price over the past year to close yesterday’s trading session at $52.78. Also, in terms of forward EV/S, the stock’s 2.95x is 19.5% higher than the 2.47x industry average. Additionally, the stock’s 2.73x forward price/book is more than that of 2.67x. Avoid the stock immediately.

The overall industry has been experiencing a rise in demand due to the COVID-19 Omicron variant. This delayed office reopenings schedules and caused a continuation hybrid work structure. According to a Market Watch report, the Global Telecom Services Market is anticipated to grow more than 5.4% by 2027.Therefore, we think investors looking to benefit from the industry’s growth could bet on quality telecom stocks AT&T Inc. (T), Lumen Technologies, Inc. (LUMN), and Cogent Communications Holdings, Inc. (CCOI) instead.

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