The global telecom market saw a great deal of activity over the past week as companies like Telefonica saw their prospects increase while others struggled to maintain their position on the world’s stock exchanges. Here are some of the most compelling telecom capital market stories to come to light in recent days:
Telefonica sees light at the end of the tunnel
Two years ago, Spain’s Telefonica enacted a plan to shore up its financial status by cutting some dead weight. In the ensuing months, the telecom sold off assets and lowered its dividends to meet these goals. Despite the adverse effects that regional economic complications presented, Telefonica appears to be on its way to obtaining the picture of fiscal health.
Reuters reported that Telefonica’s recently released 2013 figures point toward a financial rebound for the organization, with its overall revenues hitting forecasted levels. The telecom’s net profit increased 16.9 percent in 2013, following a decline during the previous year.
US telecoms see stock rise
Several U.S. telecoms experienced notable gains on the capital markets, buoying analysts’ perceptions regarding the entire sector. According to The Motley Fool, Verizon Communications recently witnessed a nearly 2 percent increase on the Dow Jones Industrial Average. Meanwhile, T-Mobile and Sprint stocks rose more than 2 percent during the same period.
Telecom market given seal of approval
According to some industry analysts, those gains are not mere blips on the radar, but harbingers of more sustained development and financial success. The Motley Fool contributor Travis Hoium recently argued that some major telecoms presented potentially large paydays for prospective investors. He noted that AT&T, for instance, saw its quarterly dividend increase to $0.46, giving it a 5.6 percent yield for investors. Because AT&T and Verizon hold uncontested spots at the top of the U.S. mobile market, they remain safe options for individuals looking to profit from the sector. Furthermore, the widespread infrastructure erected by AT&T and Verizon will offer robust returns for years to come.
“Investors shouldn’t ignore these two telecom stock that are deeply ingrained in U.S. daily life. While cell phone, app, search engine, and social media companies may come and go quickly, the cell towers that carry data to our mobile devices are in higher demand today than they’ve ever been.”
Verizon ‘buy’ rating reaffirmed
That bullish outlook on Verizon’s stock was given more weight when analysts from TheStreet reaffirmed the telecom’s “buy” rating. According to the source, Verizon outpaced the industry average for revenue growth and presented a solid return on equity, driving TheStreet’s positive outlook for the telecom.
“[Verizon’s] strengths can be seen in multiple areas, such as its revenue growth, notable return on equity, expanding profit margins, good cash flow from operations and increase in stock price during the past year,” TheStreet stated. “We feel these strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.”
Telecom leads Asia-Pacific stock drop
The Asia-Pacific stock market witnessed a slight dip in recent days, with the region’s telecommunications sector in particular showing a decline. According to Bloomberg, the MSCI Asia Pacific Index dropped 0.1 percent. Japan appeared to perform the most poorly as its Topix index slid 0.7 percent while other nations such as South Korea and Taiwan enjoyed nominal growth. Telecoms posted the second largest decline in the Asia-Pacific region with a 0.4 percent drop overall.
