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Trump's Victory Could Explode High-Yield Dividend Telecom Stocks Higher

Lee Jackson

Published: November 11, 2024 7:13 am

Last Updated: November 11, 2024 8:12 am

Key Points

• Wall Street is anticipating fewer regulations during Trump’s second term.
• The recent federal funds rate cut could be the last for a while.
• Should quality telecom dividend stocks be in your portfolio? A seasoned financial advisor can let you know with a review. To learn more, click here. 

Investors love dividend stocks, especially the high-yield variety because they offer a significant income stream and have massive total return potential. Total return includes interest, capital gains, dividends, and distributions realized over time. In other words, the total return on an investment or a portfolio consists of income and stock appreciation.

For example, if you buy a stock at $20 that pays a 3% dividend and goes up to $22 in a year, your total return is 13%. That is, 10% for the increase in stock price and 3% for the dividends paid.

President-elect Donald Trump’s overwhelming victory could fundamentally change the investment landscape for years. One reason Wall Street is overjoyed, and so is most of the American business community, is that punishing regulations often stifle profit for public companies. Money spent on complying with tedious, often complex, and changing regulations eats into capital that corporate America could use to reinvest in its core business.

A less aggressive regulatory climate and the end of many of the Biden White House and administration regulations could offer a massive boost to the telecom sector, which could be a huge win for dividend investors looking to add some of the companies in the industry that offer some of the most significant dividends on Wall Street.

We screened the U.S. telecom sector, looking for companies that pay large and dependable dividends. We found three companies that could be big winners as Trump returns to 1600 Pennsylvania Avenue. All are rated buy at the top Wall Street firms we cover.

Why do we cover dividend stocks?

Since 1926, dividends have contributed approximately 32% of the total return for the S&P 500, while capital appreciations have contributed 68%. Therefore, sustainable dividend income and capital appreciation potential are essential for total return expectations.

AT&T

The legacy telecommunications company has been undergoing a lengthy restructuring over the last few years while lowering its dividend, which still stands at a rich 5%. AT&T Inc. (NYSE: T) provides worldwide telecommunications, media, and technology services. Its Communications segment offers wireless voice and data communications services.

AT&T sells through its company-owned stores, agents, and third-party retail stores:

• Handsets
• Wireless data cards
• Wireless computing devices
• Carrying cases
• Hands-free devices

AT&T also provides:

• Data
• Voice
• Security
• Cloud solutions
• Outsourcing
• Managed and professional services
• Customer premises equipment for multinational corporations, small and mid-sized businesses, and governmental and wholesale customers.

In addition, this segment offers residential customers broadband fiber and legacy telephony voice communication services.

It markets its communications services and products under:

• AT&T
• Cricket
• AT&T Prepaid
• AT&T Fiber

The company’s Latin America segment provides wireless services in Mexico and video services in Latin America. This segment markets its services and products under the AT&T and Unefon brands.

Comcast

This top media entertainment and telecom company remains a Wall Street favorite and pays a solid 2.75% dividend. Comcast Corp. (NYSE: CMCSA) is a global media and technology company.

It operates through four segments:

• Residential Connectivity & Platforms
• Business Services Connectivity
• Media, Studios
• Theme Park segments

The Residential Connectivity & Platforms segment provides residential broadband and wireless connectivity services, residential and business video services, sky-branded entertainment television networks, and advertising.

The Business Services Connectivity segment offers connectivity services for small business locations, including broadband, wireline voice, and wireless services. It also provides solutions for medium-sized customers, larger enterprises, and small business connectivity services in the United Kingdom.

The Media segment operates NBCUniversal’s television and streaming business, including:

• National and regional cable networks
• The NBC and Telemundo broadcast networks
• Owned local broadcast television stations
• Peacock, a direct-to-consumer streaming service

It also operates international television networks, including Sky Sports networks and other digital properties. The Studios segment operates NBCUniversal and Sky film and television studio production and distribution operations.

The Theme Parks segment operates Universal theme parks in:

• Orlando, Florida
• Hollywood, California
• Osaka, Japan
• Beijing, China

Verizon

This top telecommunications company offers tremendous value, trading at 9.5 times estimated 2025 earnings and paying investors a strong 6.16% dividend. Verizon Communications Inc. (NYSE: VZ) provides communications, technology, information, and entertainment products and services to consumers, businesses, and governmental entities worldwide.

It operates in two segments:

• Verizon Consumer Group
• Verizon Business Group

The Consumer segment provides wireless services across the wireless networks in the United States under the Verizon and TracFone brands and through wholesale and other arrangements.

Verizon also provides fixed wireless access (FWA) broadband through its wireless networks and related equipment and devices, such as:

• Smartphones
• Tablets
• Smartwatches and other wireless-enabled connected devices

The segment also offers wireline services in Mid-Atlantic, Northeastern United States, and Washington D.C. through its fiber-optic network, Verizon Fios product portfolio, and a copper-based network.

The Business segment provides wireless and wireline communications services and products, including:

• FWA broadband
• Data
• Video and conferencing
• Corporate networking
• Security and managed network
• Local and long-distance voice
• Network access services to deliver various IoT services and products to businesses, government customers, and wireless and wireline carriers in the United States and internationally

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