Telecom Sector One of the Strongest Performers in 2012 -- Investors Flock to Strong Cash Flows From Sprint and Verizon
Posted on July 05, 2012 at 08:20 AM EDT
Five Star Equities Provides Stock Research on Sprint and Verizon
NEW YORK, NY -- (Marketwire) -- 07/05/12 -- Despite concerns of a global economic slowdown the telecom sector has been one of the strongest performers in 2012, as investors have been attracted to the strong cash flows and high dividend yields of telecom companies. Year-to-date the S&P 500 is up 9.26 percent, while the telecom sector of the S&P 500 Index has seen a 14.78 percent gain. Five Star Equities examines the outlook for companies in the S&P 500 Index and provides equity research on Sprint Nextel (NYSE: S) and Verizon Communications Inc. (NYSE: VZ).
Telecom companies have gained the reputation as safe havens as a majority of their revenues are generated from within the U.S. and less likely to be affected by the current European debt crisis. The S&P 500's telecom sector hit a four-year high on June 18 according to data from Bloomberg.
"What people really flock to in lousy markets is ... recession-resistant industries where they have stable cash flows and products and services that people absolutely cannot live without," said Barry Schwartz, vice-president at Baskin Financial Services Inc.
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Sprint Nextel has rebounded strongly in 2012 as shares of the company have gained nearly 50 percent year-to-date. "They have, in our view, taken bankruptcy off the table for the next several years at least," said Christopher King, telecom and cable services analyst at Stifel Nicolaus. "So that's helped buoy the stock."
SFR Business Team, a leading French provider of enterprise communications services, and Verizon, a leading provider of global communications and IT solutions, recently announced an agreement under which the companies will provide global telecommunications solutions and support to multinational companies based or operating in France.
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