SA Asks: What's the best telecom play right now?

[Smart phone with AT&T.com site in the pocket]
franckreporter

What's the best telecommunications sector play right now for investors?

We asked Seeking Alpha analysts Summit Research [https://seekingalpha.com/author/summit-research] and Daniel Jones [https://seekingalpha.com/author/daniel-jones] for their picks.

Summit Research [https://seekingalpha.com/author/summit-research]: AT&T (NYSE:T [https://seekingalpha.com/symbol/T]) remains an attractive long-term telecom investment, especially for income-focused investors. The stock’s dividend yield differential from the benchmark U.S. 10-year Treasury has also increased and flipped back to positive from earlier this year, while the underlying business continues to execute with consistent delivery of market share gains across mobility, fiber, and even its nascent foray into fixed wireless, without sacrificing profit margins.

Considering ongoing uncertainties about consumer spending and intensifying competition, it’s also been prudent that AT&T (NYSE:T [https://seekingalpha.com/symbol/T]) is adopting a comparatively moderate investment cycle compared to its industry peers. This differs from Verizon’s (NYSE:VZ [https://seekingalpha.com/symbol/VZ]) additional investment outlays poured into its proprietary “AI Connect” initiative, as well as its string of aggressive acquisitions that recently added Starry to the mix.

Taken together, AT&T (T [https://seekingalpha.com/symbol/T]) looks well-positioned to preserve its consistent record of share gains and earnings accretion observed in recent quarters. These remain key supporting factors to its ongoing deleveraging efforts, as well as alignment with its income-focused investors’ interests.

Daniel Jones: [https://seekingalpha.com/author/daniel-jones] When it comes to the best telecommunications plays out there, I am currently torn between Verizon (NYSE:VZ [https://seekingalpha.com/symbol/VZ]) and AT&T (T [https://seekingalpha.com/symbol/T]), if we are talking about the major players in the market. Both firms are attractive, but I am increasingly liking Verizon more.

If we expand this to focus on all telecommunications companies, including those in the telecommunications infrastructure space, the top of the list for me is absolutely Uniti Group (NASDAQ:UNIT [https://seekingalpha.com/symbol/UNIT]). The last article that I wrote about the business was published in early August of this year. At the time, the stock had been dropping, and it has fallen even more since then. The firm completed its merger with Windstream in July. And as I detailed in that article, the business looked set to achieve significant growth in fiber over the next few years.

The transaction simplifies the business in many respects and removes the risk that Windstream, which accounts for the vast majority of the company's cash flow, will eventually transition away from it. It also opens the door to meaningful shareholder value creation. As I detailed in that article, annualized upside over the next few years should be somewhere between 33.2% and 71.9%. But the stock has fallen even more since then. At that time, shares were $7.25. Today, they stand at $6.13.

At the low end, I believe that the company's growth prospects open the door to a share price of between $21.17 and $53.95. But of course, this will take some time to realize. The current expectation for it to achieve its growth targets is 2028. Still, that is a significant amount of upside for such a short window of time. It's also why it is a major holding in my existing portfolios.

* Top Integrated Telecommunications Services Stocks [https://seekingalpha.com/screeners/9409aed1b3-Top-Integrated-Telecommunication-Services-Stocks]
* Top Cable and Satellite Stocks [https://seekingalpha.com/screeners/940837608f-Top-Cable-and-Satellite-Stocks]
* Top Alternative Carriers [https://seekingalpha.com/screeners/9409aed1b0-Top-Alternative-Carriers-Stocks]

MORE ON AT&T

* AT&T: Don't Be Tempted To Buy This Dip Now [https://seekingalpha.com/article/4828901-at-and-t-dont-be-tempted-to-buy-this-dip-now]
* AT&T: A Switch To Verizon Has Never Looked More Irresistible [https://seekingalpha.com/article/4828501-at-and-t-a-switch-to-verizon-has-never-looked-more-irresistible]
* AT&T Stock: Is This Free Cash Flow Machine A Buy On The Dip? [https://seekingalpha.com/article/4828494-att-stock-free-cash-flow-machine-buy-on-dip]
* AT&T snaps six straight sessions of losses [https://seekingalpha.com/news/4499577-att-snaps-six-straight-sessions-of-losses]
* 2026 could be a pivotal year for the U.S. telecom and cable sectors - Goldman Sachs [https://seekingalpha.com/news/4491355-2026-could-be-a-pivotal-year-for-the-us-telecom-and-cable-sectors---goldman-sachs]