In this article, we discuss the 10 best telecom dividend stocks to buy for 2022.
The COVID-19 pandemic has highlighted the significance of the telecommunications industry in meeting the high demands for connectivity. During the height of the pandemic, major telecom players such as AT&T Inc. (NYSE:T), Comcast Corporation (NASDAQ:CMCSA), Verizon Communications Inc. (NYSE:VZ), and Vodafone Group Public Limited Company (NASDAQ:VOD) have benefitted from a surge in the use of telecom services.
With more than two years in the pandemic, the growth of telecom companies has been bolstered by the increase in data traffic and use of broadband services, as there has been a greater reliance on connectivity and online services. For instance, AT&T Inc. (NYSE:T) reported a 40% increase in wireless voice usage during the first six months of the pandemic in 2020, while Vodafone Group Public Limited Company (NASDAQ:VOD) noted a 50% increase in fixed broadband usage in Italy and Spain.
What’s Next for the Telecommunication Industry?
During the pandemic, the telecom industry has accounted for keeping the world connected despite the social distancing protocols. Individuals, businesses, and the government have benefited from the reliable connectivity services these telecom companies provided including broadband, data, mobile, and network services. Telecom companies are growing their services by integrating key digital technologies such as AI, cloud computing, IoT, and big data to meet consumer demands.
According to a market report published by the press release firm Business Wire, as the industry recovers from the financial distress caused by the COVID-19 pandemic, the global telecom industry is projected to grow at a CAGR of 6.2% to $3.46 trillion in 2025. One of the major catalysts that support the growth of the telecom industry in the US is the $65 billion broadband fund from the $1.2 trillion infrastructure bill.
Cloud computing is a high-tech area in which telecom companies are heavily investing. According to a report published by enterprise application development company Aimprosoft, telecom providers are expected to spend $900 billion on mobile capital expenditures (CapEx) between 2021 and 2025, with roughly 80% of the money going toward 5G integration on cloud infrastructure. Investing in cloud infrastructure allows telcos to expand their business from being a communication service provider to a digital service provider. AT&T Inc. (NYSE:T) and Comcast Corporation (NASDAQ:CMCSA) are two of the most successful telco companies disrupting the traditional telecom industry through digital transformation.
Our Methodology
In this article, we focused on dividend-paying telecom stocks. We chose telecom stocks with at least a 2% dividend yield and ranked them from lowest to highest yield.
In addition, hedge fund sentiment was measured using data from 867 hedge funds tracked by Insider Monkey in Q3 2021.
Photo by Mario Caruso on Unsplash
Best Telecom Dividend Stocks To Buy for 2022
10. Comcast Corporation (NASDAQ:CMCSA)
Dividend Yield as of February 2: 2.17%
Number of Hedge Fund Holders: 75
Comcast Corporation (NASDAQ:CMCSA) is a media and technology firm that serves over 57 million customers in the US and Europe. In the fourth quarter of 2021, Comcast Corporation (NASDAQ:CMCSA) added 1.1 million customers in its cable communications segment, 1.3 million in its broadband segment, and 1.2 million in its wireless segment.
The Pennsylvania-based telecom giant upped its quarterly dividend payment by 8% to $0.27 per share. In 2021, Comcast Corporation’s (NASDAQ:CMCSA) revenue grew by 12.4% to $116.4 billion. The company also added 212,000 high-speed internet customers in the fourth quarter of 2021.
In the third quarter of 2021, 75 hedge funds owned Comcast Corporation (NASDAQ:CMCSA), compared to 84 in the previous quarter. Despite the fact that hedge funds reduced their holdings in Comcast Corporation (NASDAQ:CMCSA), the telecom company remains one of the most popular dividend-paying telecom stocks among investors and market analysts. On January 28, Cowen analyst Gregory Williams increased his price target for the telecom stock to $64 from $60 while maintaining an Outperform rating on the shares.
9. Chunghwa Telecom Co., Ltd. (NYSE:CHT)
Dividend Yield as of February 2: 3.56%
Number of Hedge Fund Holders: 6
Another telecom dividend stock to buy for 2022 according to market analysts is broadband provider Chunghwa Telecom Co., Ltd. (NYSE:CHT). In the third quarter of 2021, 6 hedge funds were bullish on Chunghwa Telecom Co., Ltd. (NYSE:CHT), with stakes totaling $157 million, as compared to 7 funds in the preceding quarter worth $165 million. Renaissance Technologies is the largest shareholder of the company, owning over 3.7 million shares worth $148 million.
Chunghwa Telecom Co., Ltd. (NYSE:CHT), like Comcast Corporation (NASDAQ:CMCSA), Verizon Communications Inc. (NYSE: VZ), and Vodafone Group Public Limited Company (NASDAQ:VOD), pays dividends to its shareholders. The Taiwanese telecom company offers a dividend yield of 3.56%.
The Taipei-based telecom behemoth has an 85% market dominance in broadband services and a 35% market share in mobile communication services in Taiwan. On top of its telecom services, Chunghwa Telecom Co., Ltd. (NYSE:CHT) sells mobile handsets, wearables, and tablets. The company’s mobile communications revenue increased 9% year over year to NT$27.20 billion in Q4 2021, owing to an increase in phone sales and mobile service profit. The revenue growth was mainly driven by the growing adoption of 5G services as well as the release of the iPhone 13.
Chunghwa Telecom Co., Ltd. (NYSE:CHT) is optimistic about its growth in 2022, expecting a 1.1% to 1.7% increase in total revenue from NT$210.48 billion in 2021. Chunghwa Telecom Co., Ltd. (NYSE:CHT) intends to expand its business in the coming year, with a budget of NT$36.77 billion set aside for strategic investments, acquisitions, plant and equipment, and intangible assets.
8. TELUS Corporation (NYSE:TU)
Dividend Yield as of February 2: 4.36%
Number of Hedge Fund Holders: 12
Canadian telecom and IT service provider TELUS Corporation (NYSE:TU) is one of the world’s most extensive communication companies. Just like Comcast Corporation (NASDAQ:CMCSA), Verizon Communications Inc. (NYSE: VZ), and Vodafone Group Public Limited Company (NASDAQ:VOD), TELUS Corporation (NYSE:TU) is one of the major dividend-paying telecom companies that offer 5G network services. In fact, TELUS Corporation (NYSE:TU) covers 5G connections for roughly 70% of the Canadian population, as of January 2022.
TELUS Corporation (NYSE:TU) launched its fastest internet connection with symmetrical upload and download speeds of 2.5 Gbps in Edmonton, Canada on February 2.
Even after decades in the telecommunications industry, TELUS Corporation (NYSE:TU) continues to witness growth throughout its operations. During the third quarter of 2021, the Vancouver-based telecom company increased its mobile and fixed customer base by 320,000, up 43,000 from last year. Meanwhile, the company’s wireline customers added 75,000 in the same quarter.
According to Insider Monkey’s Q3 database, 12 hedge funds reported $141 million in stakes in TELUS Corporation (NYSE:TU) in the third quarter of 2021. Owning over 3.35 million shares valued at $74 million, Renaissance Technologies is the biggest stakeholder of the company.
7. Verizon Communications Inc. (NYSE:VZ)
Dividend Yield as of February 2: 4.81%
Number of Hedge Fund Holders: 57
Verizon Communications Inc. (NYSE:VZ) is among the telecom dividend stocks that appeal to income-oriented investors as the company pays its shareholder an annual dividend of $2.56 per share. Verizon Communications Inc. (NYSE:VZ) is one of the most dependable dividend stocks, marking a 15-year streak of dividend increases last year.
Verizon Communications Inc. (NYSE:VZ) had over 121 million subscribers as of the second half of 2021, making it the largest wireless carrier in the United States. Verizon Communications Inc. (NYSE:VZ) reported its Q4 2021 earnings recently and the company’s full-year revenue came in at $133.6 billion, an increase of 4.1% year-over-year. In addition, the telecom company ended 2021 with a free cash flow of $19.3 billion.
Verizon Communications Inc. (NYSE:VZ) saw its stock rise 2.2% on January 28 after the U.S. Federal Aviation Administration (FAA) allowed the telecom giant to safely turn on more 5G towers following aviation safety issues at the beginning of the year. According to Reuters, Verizon Communications Inc. (NYSE: VZ) enabled approximately 5,100 towers in January and will be able to activate approximately 2,000 more in February.
As of the end of September 2021, Berkshire Hathaway was the largest shareholder of Verizon Communications Inc. (NYSE:VZ), owning 158 million shares worth $8.6 billion. Overall, 57 funds of the 867 elite funds tracked by Insider Monkey reported owning stakes in Verizon Communications Inc. (NYSE:VZ) at the end of September 2021.
6. Cogent Communications Holdings, Inc. (NASDAQ:CCOI)
Dividend Yield as of February 2: 4.80%
Number of Hedge Fund Holders: 20
Cogent Communications Holdings, Inc. (NASDAQ:CCOI) is a Washington-based telecom company that provides high-speed internet, VPN, and data center services to a variety of enterprises including health care providers, web hosting companies, mobile phone operators, and educational institutions. Cogent Communications Holdings, Inc. (NASDAQ:CCOI) operates 59,700 route miles of intercity fiber and more than 38,800 metro fiber miles across six continents. In addition, the telecom company owns 54 internet data centers.
Cogent Communications Holdings, Inc. (NASDAQ:CCOI) reported in its Q3 2021 earnings report that total customer connections increased 5.1% year over year to 92,991. Furthermore, Communications Holdings, Inc. (NASDAQ:CCOI) added 124 on-net buildings over the previous year, bringing the total count to 3,008.
On January 24, investment banking firm Credit Suisse maintained an Outperform rating on the telecom stock with a price target of $80. Cogent Communications Holdings, Inc. (NASDAQ:CCOI) is among the best telecom dividend stocks to buy for 2022, according to market analysts along with Comcast Corporation (NASDAQ:CMCSA), Verizon Communications Inc. (NYSE: VZ), and Vodafone Group Public Limited Company (NASDAQ:VOD).
A total of 20 hedge funds monitored by Insider Monkey in the third quarter of 2021 were bullish on Cogent Communications Holdings, Inc. (NASDAQ:CCOI), compared to 22 funds in the prior quarter.
5. BCE Inc. (NYSE:BCE)
Dividend Yield as of February 2: 5.33%
Number of Hedge Fund Holders: 15
BCE Inc. (NYSE:BCE) is a Canadian telecom company that pays a reasonable dividend yield of 5.33% to shareholders. Ookla named BCE Inc. (NYSE:BCE) the fastest 5G mobile network in Canada for the second time in a row in early February. The number of hedge funds with a stake in BCE Inc. (NYSE:BCE) increased to 15 at the end of the third quarter of 2021, up from 14 the previous quarter. These stakes are worth a total of $129.1 million, up from $113.2 million.
BCE Inc. (NYSE:BCE), a leading 5G provider in Canada, encourages cloud adoption among customers. The company teamed up with VMware, Inc. (NYSE:VMW) and Amazon.com, Inc. (NASDAQ:AMZN) in October to deliver digital transformation services to its customers.
During the fourth quarter of 202, the Canadian telecom company added 47,618 retail net subscribers and 29,191 retail IPTV customers. The company’s total revenue in Q4 2021 jumped 1.8% year over year to C$6.21 billion. On February 3, BCE Inc. (NYSE:BCE) increased its quarterly dividend by 5.1% to C$0.02 per share. As of early February, the stock is up 23% in the past twelve months.
4. Vodafone Group Public Limited Company (NASDAQ:VOD)
Dividend Yield as of February 2: 6.61%
Number of Hedge Fund Holders: 18
UK-based Vodafone Group Public Limited Company (NASDAQ:VOD) is among the leading converged connectivity provider globally serving 114 million mobile users in Europe and 187 million mobile customers in Africa as of February 2022. Vodafone Group Public Limited Company (NASDAQ:VOD) reported strong year-over-year service revenue growth of 2.7% in the third quarter of fiscal 2022, with revenue totaling €9.65 billion.
Vodafone Group’s value-added services such as IoT, cloud, security, and wholesale services accounted for 27% of its service revenue in Q3 FY 2022.
Vodafone Group Public Limited Company (NASDAQ:VOD) shares rose nearly 20% in January following merger talks regarding its UK unit, which could merge with CK Hutchison’s Three UK, and its Italy operation, which could merge with Iliad.
By the end of January, news that Swedish investment firm Cevian Capital had positioned an undisclosed holding in the UK-based telecom company had put Vodafone Group Public Limited Company (NASDAQ:VOD) in the spotlight.
Meanwhile, 18 hedge funds were optimistic on Vodafone Group Public Limited Company (NASDAQ:VOD) at the end of the third quarter of 2021, with stakes totaling $613.7 million, up from 17 funds the previous quarter.
3. SK Telecom Co.,Ltd (NYSE:SKM)
Dividend Yield as of February 2: 7.12%
Number of Hedge Fund Holders: 6
SK Telecom Co.,Ltd (NYSE:SKM) is Korea’s largest wireless operator, with approximately 45% market share. As of the third quarter of 2021, SK Telecom Co.,Ltd (NYSE:SKM) had 31.5 million mobile subscribers, 6.56 million high-speed internet customers, and 8.9 million pay-tv subscribers.
Aside from its telecom dominance in Korea, SK Telecom Co.,Ltd (NYSE:SKM) has been expanding its business to 5G, metaverse, AI, and digital infrastructure services. The South Korean wireless carrier launched “T Universe” in August 2021, a subscription-based service that allows customers of SK Telecom Co.,Ltd (NYSE:SKM) to access items and services from global retailers such as Amazon.com, Inc. (NASDAQ:AMZN), Starbucks Corporation (NASDAQ:SBUX), and Alphabet Inc. (NASDAQ:GOOG).
Apart from the telco’s subscribers, the T Universe platform service is available to approximately 50 million individuals in Korea as of November 2021. The company plans to achieve 36 million T Universe subscribers and KRW 8 trillion of the yearly gross merchandise value (GMV) by 2025.
SK Telecom Co.,Ltd (NYSE:SKM) launched Nugu, Korea’s first AI speaker, in December, in collaboration with Amazon.com, Inc.’s (NASDAQ:AMZN) Alexa.
According to the hedge funds tracked by Insider Monkey in Q3 2021, 6 elite funds reported owning stakes in SK Telecom Co.,Ltd (NYSE:SKM), totaling $108 million. Oldfield Partners held the largest stake in SK Telecom Co.,Ltd (NYSE:SKM) during Q3 2021, owning 1.92 million shares worth $58 million.
2. Orange SA (NYSE:ORAN)
Dividend Yield as of February 2: 7.99%
Number of Hedge Fund Holders: 3
Orange SA (NYSE:ORAN) is a French mobile telecommunications company that provides data, voice, and broadband services to over 220 million mobile customers and over 44.7 million fixed-line clients as of October 2021. Orange SA (NYSE:ORAN) also operates a mobile financial segment that serves over 1.6 million European and 600,000 African clients.
Orange SA (NYSE:ORAN) is one of France’s and Spain’s leading passive mobile infrastructure operators, with over 26,000 cell sites as of November 2021. Orange SA (NYSE:ORAN) shares rose 3.4% on January 27 following news of a possible merger of its mobile towers with Germany-based telecom firm Deutsche Telekom AG (OTC:DTEGY) and UK-based telecom company Vodafone Group Public Limited Company (NASDAQ:VOD).
Hedge funds are becoming more bullish on Orange SA (NYSE:ORAN) with its fast-growing business. Arrowstreet Capital, the telecom company’s largest shareholder, increased its stake in Orange SA (NYSE:ORAN) by 26% at the end of Q3 2021, bringing its total holdings to 1,064,347 shares worth $11.5 million.
1. AT&T Inc. (NYSE:T)
Dividend Yield as of February 2: 8.16%
Number of Hedge Fund Holders: 66
After consistently increasing its dividend payout in the last three decades, American telecom giant AT&T Inc. (NYSE:T) has been officially dethroned as a dividend aristocrat on February 1.
The company recently announced a 47% dividend cut to $1.11 per share per year and to divest itself of its WarnerMedia division through a spinoff. AT&T shareholders will get 0.24 shares of the new company for every 1 share of AT&T that they own.
Citadel Investment Group increased its position in AT&T Inc. (NYSE:T) by 7% in Q3 2021, bringing the hedge fund’s total holdings to 34.7 million shares valued at $940 million, making Citadel the company’s largest shareholder. Millennium Management, on the other hand, grew its holding in AT&T Inc. (NYSE:T) by 166% at the end of Q3 2021.
On January 27, Deutsche Bank kept a Buy rating on AT&T Inc. (NYSE:T) with a price target of $30.
You can also take a peek at the 10 Stocks Activist Investors are Buying and Top 10 Stock Picks of Prescott Group Capital Management.
Follow Insider Monkey on Twitter
Suggested articles:
- Top Dividend Stock Picks of Billionaire George Soros
- 10 Key Earnings Reports from The Financial Sector
- 10 Stocks to Sell According to Billionaire Daniel Sundheim
Disclosure: None. 10 Best Telecom Dividend Stocks To Buy for 2022 is originally published on Insider Monkey.
