Communication Services

The Communications Services Sector contains companies that provide communications services primarily through a fixed-line, cellular, wireless, high bandwidth and/or fiber optic cable network.

Last % Change Market Cap Market Weight Weighting Recommendations
S&P Capital IQ Ned Davis Research (PDF) Log in required.
-2.38% $4.52T 10.46% Overweight +0.10%

Sector Commentary from Standard & Poor's

<p>CFRA recommends underweighting the S&P 500 telecommunications services sector. Year-to-date through September 4 , 2018, the S&P 500 telecom services index, which represented 1.9% of the S&P 500 index, was down 8.3% in price, compared with an 8.3% increase in the S&P 500. In 2017, this sector index declined 6.0% versus a price advance of 19.4% for the 500. There are two sub-industry indexes in this sector: integrated telecommunications services, which represents approximately 96% of the sector; and alternate carriers, which accounts for the remainder.</p><p>The cap-weighted average of this sector's component company CFRA STARS (STock Appreciation Ranking System) is 3.5 out of 5.0, as compared with a cap-weighted average of 3.7 for the S&P 500. The sub-industry within this sector that currently shows the highest average STARS is integrated telecommunications, while alternative carriers has the lowest average STARS. According to S&P Capital IQ Consensus Estimates, the sector is projected to record a 20.7% year-over-year rise in operating earnings per share in 2018, as compared with the S&P 500&#8217;s estimated EPS gain of 22.2%. For 2017, this sector reported a 1.6% rise in EPS versus a 12% increase for the S&P 500. In addition, revenues for the sector are forecast to rise 6.8% in 2018 versus the S&P 500&#8217;s projected increase of 8.4%. The sector's price-to-earnings ratio of 10.2X, based on consensus next-12-month operating EPS estimates, is well below the S&P 500's forward P/E of 17.3X. S&P Capital IQ also reports that the consensus long-term EPS growth estimate for this sector is 3.9% versus the S&P 500's 14.0%, giving the sector a P/E-to-projected EPS growth rate (PEG) ratio of 2.6X, which is significantly above the broader market's PEG of 1.2X. Finally, this sector pays a dividend yield of 5.6%, as compared with the yield of 1.9% for the S&P 500.</p><p>CFRA's proprietary technical indicator for this sector currently shows a neutral reading. In researching the past market history of prices and trading volume for each company, CFRA's computer models apply special technical methods and formulas to identify and project price trends for the sector.</p><p>/Sam Stovall<p>


Understanding Weighting Recommendations

Sector weighting recommendations are provided by independent, third-party research firms to help further refine your analysis.

Some sectors get "over," "market," or "under" weighted, which means that the research firm recommends that more, the same, or less of the sector should be held in your portfolio than is held in the market.

Learn more about the average recommendation holding period and methodology of the research firms:

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U.S. Sectors & Industries Performance is represented by the S&P 500 GICS® (Global Industry Classification Standard) indices. Last % change is the nominal change in the price of the index from the previous trading day's close expressed as a percentage as of the index value at the time noted in the Date & Time field. All dates and times are reported in ET.

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GICS is an industry classification system developed by Standard & Poor's in collaboration with Morgan Stanley Capital International (MSCI). S&P uses GICS to determine the market segment to which a company is assigned. A company is assigned to a single GICS industry according to the definition of its principal business activity as determined by Standard & Poor's and MSCI. Revenues are a significant factor in defining principal business activity; however, earnings analysis and market perception are also important criteria for classification. There are currently 10 sectors and 68 industries. Three of the 68 industries do not have companies represented in the S&P 500 Index; therefore, performance is not available for Marine, Transportation and Infrastructure, and Water Utilities.

Standard & Poor's 500 (S&P 500) Index is an unmanaged market-weighted index of 500 of the nation's largest stocks from a broad variety of industries. The S&P 500 represents about 80% of the total market value of all stocks on the New York Stock Exchange. Market-weighted means that component stocks are weighted according to the total value of their outstanding shares.

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Chart Performance enables you to chart and change performance timeframe of daily percent change for the indices as well as the ability to add a user-entered symbol.

Market Cap is the sum of the market value of each company assigned to the applicable GICS sector or industry. Market value or capitalization is calculated by multiplying the number of common shares outstanding by the market price per share at the end of each trading day.

Market Weight is updated weekly from S&P Capital IQ and represents the sum of the market cap of the companies in the applicable S&P 500 GIC sector index as a percentage of the total S&P 500 Index market capitalization.

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