Exploit the Seasonal Opportunity With These 5 Telecom Stocks

Telecoms like dividend aristocrat BCE Inc. (TSX:BCE)(NYSE:BCE) tend to outperform during the summer months. Find out why.

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The reality is, a lot of the big shots on Wall Street and Bay Street do quite well for themselves in terms of their monthly paycheques.

So, when the warmer weather rolls around each year, a lot of those folks can afford to head out of town to enjoy the summer vacation with their families.

As a result, the financial markets tend to slow down somewhat between about May and October.

This means you may not expect to see quite the same level of activity that your normally would in some of the higher-volatility stocks, like, for example, Teck Resources Ltd. (TSX:TECK.B)(NYSE:TECK) or Shopify Inc. (TSX:SHOP)(NYSE:SHOP).

But at the same time, those folks who end up going away for the summer will usually park their money in safer, lower-risk investments — stocks like consumer staples, telecoms, and utilities.

If you’re looking to perk up your investment returns over this summer season, you may want to close attention to these five leading telecom players.

BCE Inc. (TSX:BCE)(NYSE:BCE) — probably more well known as simply “Bell” — is Canada’s largest telecom carrier as well as its oldest.

BCE pays a great dividend yield of 5.60%, and while you may not get any huge increases to that payout any time in the near future, it’s a stable dividend that is probably best suited for income investors and retirees.

Among those companies making this list, Shaw Communications Inc. (TSX:SJR.B)(NYSE:SJR) is probably the most interesting.

Shaw has been making some pretty aggressive moves of late to shake up the Canadian market with hopes that it can catch some of the larger incumbents, like BCE, Rogers Communications Inc. (TSX:RCI.B)(NYSE:RCI), and Telus Corporation (TSX:T)(NYSE:TU), asleep at the wheel.

So far, at least, investors have been taking notice, which has helped propel Shaw shares up 15% since reporting its quarterly earnings results back in April.

If there was going to be any company making major moves in the Canadian market, my money is with Shaw — at least for the time being.

Do you know which company is the largest telecom in the world? The answer to that question, at least in terms of the number of subscribers, is China Mobile Ltd. (ADR) (NYSE:CHL).

China Mobile has more subscribers than even AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ), and on top of that the company is sitting on an unbelievable hoard of cash — more than US$60 billion at last count.

The Chinese market is going through a once-in-a-lifetime adoption of mobile and data-intensive devices, and as the dominant company in that market, China Mobile stands to benefit handsomely from this trend.

Bottom line

Compared to the consumer staples sector and traditional utilities, the market for the services that telecom companies provide still offers solid growth potential.

Particularly given the impending 5G network launch and how that should translate to higher data and video usage, the telecom sector appears to make a lot of sense for Foolish investors this summer season.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Jason Phillips has no position in any of the stocks mentioned. Tom Gardner owns shares of Shopify. The Motley Fool owns shares of Shopify, SHOPIFY INC, and Verizon Communications. Shopify and Verizon Communications are recommendations of Stock Advisor Canada.

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