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Investing in the communication sector can expose you to a cutting-edge industry most Americans use daily — including social media and search engine companies, wireless telecommunications providers and streaming services.
Read on to learn more about the demand of this industry and check out the best communication services stocks you can invest in now.
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Overview: Communication Services Stocks
The Global Industry Classification Standard (GICS) telecommunication services sector was renamed communication services in 2018. This change shows that the way we communicate, share information and entertain ourselves has greatly and fundamentally changed due to the convergence of telecom, media and technology.
The new communication services sector also incorporated communication providers from the information technology sector. These include companies like Facebook (NASDAQ: FB) and Alphabet (NASDAQ: GOOGL). Media companies like Comcast Corp (NYSE: CMCSA) and Disney (NYSE: DIS) were also moved from the consumer discretionary sector.
The communication services sector now makes up 8.2% of the MSCI index — the original telecommunication services was just 2.5%.
Best Online Brokers for Communication Services Stocks
You can buy shares of companies in the communication services sector with online brokers. Do a little digging to see what each broker has to offer — educational resources, exchanges offered, fees and commissions required and even just how to open an account. Here are some of the top online brokers you can compare.
Best For
Intermediate Traders and Investors
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1 Minute Review
Webull, founded in 2017, is a mobile app-based brokerage that features commission-free stock and exchange-traded fund (ETF) trading. It’s regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Webull offers active traders technical indicators, economic calendars, ratings from research agencies, margin trading and short-selling. Webull’s trading platform is designed for intermediate and experienced traders, although beginning traders can also benefit.
Webull is widely considered one of the best Robinhood alternatives.
Best For
- Active traders
- Intermediate traders
- Advanced traders
Pros
- Commission-free trading in over 5,000 different stocks and ETFs
- No account maintenance fees or software platform fees
- No charges to open and maintain an account
- Leverage of 4:1 on margin trades made the same day and leverage of 2:1 on trades held overnight
- Intuitive trading platform with technical and fundamental analysis tools
Cons
- Does not support trading in mutual funds, bonds or OTC stocks
Best For
Futures Trading
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1 Minute Review
TradeStation is for advanced traders who need a comprehensive platform. The brokerage offers an impressive range of investable assets as frequent and professional traders appreciate its wide range of analysis tools. TradeStation’s app is also equally effective, offering full platform capabilities.
Best For
- Advanced traders
- Options and futures traders
- Active stock traders
Pros
- Comprehensive trading platform and professional-grade tools
- Wide range of tradable securities
- Fully-operational mobile app
Cons
- Confusing pricing structure to leave new traders with a weak understanding of what they pay
- Cluttered layout to make navigating TradeStation’s platform more difficult than it should be
Best For
Options Trading
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1 Minute Review
This publicly listed discount broker, which is in existence for over four decades, is service-intensive, offering intuitive and powerful investment tools. Especially, with equity investing, a flat fee is charged, with the firm claiming that it charges no trade minimum, no data fees, and no platform fees. Though it is pricier than many other discount brokers, what tilts the scales in its favor is its well-rounded service offerings and the quality and value it offers its clients.
Best For
- Novice investors
- Retirement savers
- Day traders
Pros
- World-class trading platforms
- Detailed research reports and Education Center
- Assets ranging from stocks and ETFs to derivatives like futures and options
Cons
- Thinkorswim can be overwhelming to inexperienced traders
- Derivatives trading more costly than some competitors
- Expensive margin rates
Best For
Advanced traders
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1 Minute Review
Moomoo is a commission-free mobile trading app available on Apple, Google and Windows devices. A subsidiary of Futu Holdings Ltd., it’s backed by venture capital affiliates of Matrix, Sequoia, and Tencent (NASDAQ: FUTU). Securities offered by Futu Inc., regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA).
Moomoo is another great alternative for Robinhood. This is an outstanding trading platform if you want to dive deep into smart trading. It offers impressive trading tools and opportunities for both new and advanced traders, including advanced charting, pre and post-market trading, international trading, research and analysis tools, and most popular of all, free Level 2 quotes.
Get started right away by downloading Moomoo to your phone, tablet or another mobile device.
Best For
- Cost-conscious traders
- Novice traders
- Active/Advanced traders
Pros
- Free Level 2 market data for all users who open an account
- Commission-free trading in over 5,000 different stocks and ETFs
- Over 8,000 different stocks that can be sold short
- $0 contract fee for trading options, no commission either
- Strong market data and analysis tools with over 50 technical indicators
- Access trading and quotes in pre-market (4 a.m. to 9:30 a.m. ET) and post-market hours (4 p.m. to 8 p.m. ET)
- No minimum deposit to open an account.
- Active trading community with more than 100,000 app users
Cons
- No phone or chat support
Features to Look for in Communication Services Stock
- Shareholders’ equity or book value: Book value is the difference between the company’s assets and its liabilities (including the value of any preferred stock that the company has issued). Book value per share is the number most investors are interested in.
For stocks with a great long-term potential, consider a book value per share that isn’t out of line with that of similar companies in the same sector.
- Return on equity. This is a company’s net profit after tax deduction divided by the book value. It shows how much a company is drawing on the stockholders’ stake in the stock. If the return on equity shows consistent growth, the stock’s price will exhibit long-term strength. A steady return in equity of more than 15% may indicate a company that knows how to manage itself properly.
- A leader in its sector: A company gains several advantages by being No. 1 or 2 in its primary sector. An industry leader can influence pricing instead of merely reacting to what others do. It also has a bigger market presence – new products have a higher chance of being accepted.
Your New Safe Haven
A majority of companies in the communication sector depend heavily on recurring revenue, while others like Google and Facebook earn from advertising. The 5G rollout expected to increase network speeds means communication service companies will continue to create demand and growth potential.
If you’ve found the best stocks and aren’t sure what to do next, be sure to read Benzinga’s Best Online Brokerages.
Turn to Webull
0 Commissions and no deposit minimums. Everyone gets smart tools for smart investing. Webull supports full extended hours trading, which includes full pre-market (4:00 AM - 9:30 AM ET) and after hours (4:00 PM - 8:00 PM ET) sessions. Webull Financial LLC is registered with and regulated by the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FINRA). It is also a member of the SIPC, which protects (up to $500,000, which includes a $250,000 limit for cash) against the loss of cash and securities held by a customer at a financially-troubled SIPC-member brokerage firm.
