While technology has blistered the rest of market with returns over 20% this year, many of the top telecom, cable and satellite stocks have trailed. Investors who have racked up these strong portfolio gains may be looking for a sector where they can stay actively invested, but shift some of their technology capital to stocks with more upside potential for the near and distant future.
In a new research report out from J.P. Morgan, the analysts covering telecom services, cable and satellite stocks have a solid shopping list for September and the rest of the year. They have devised a points system that they apply to their top stocks to buy. These point allocations are driven by shorter-term catalysts such as seasonality or competitive developments.
J.P. Morgan has come up with four top telecom stocks to buy for September that could bring investors outstanding gains. Interestingly enough, these are not all just high-dividend companies that were screened out. Here is that list of four top telecom stocks.
CenturyLink Inc. (NYSE: CTL) is the largest of the rural local exchange carriers (RLEC) and is expected to get a large dose of government money this year and beyond to provide Internet service in rural areas. Analysts believe the company will get the largest chunk of the money at $497 million for 2014. This compares to $350 million in frozen support they received in 2013. The company is one of the largest telecommunications firms in the United States and a global leader in cloud infrastructure and hosted IT solutions for enterprise customers.
The J.P. Morgan analysts feel that with company assets likely to be headed for a real estate investment trust (REIT) structure, the prospects for income investors are even more enticing, and shares of the company could be driven higher as the structural change nears completion. Investors are paid an outstanding 5.27% dividend from the company, which looks to be sustainable. The J.P. Morgan price target for the stock is $43. The Thomson/First Call consensus price target is $38.30. CenturyLink shares closed Tuesday at $40.86.