3 Cloud and Communication Stocks to Buy With Big Dividends and Upside

By Lee Jackson Published Oct 20, 11:15AM EDT

Follow 24/7 Wall St. on Google

This post may contain links from our sponsors and affiliates, and Flywheel Publishing may receive compensation for actions taken through them.

One thing that seems to be creeping into the narrative on Wall Street: there is now a possibility that rate increases expected as early as next summer may be postponed until 2016 if the economy does not dramatically pick up. The Oppenheimer team that covers cloud and communication stocks think that the top picks in the coverage universe not only offer superb growth potential, but one yields much more than current low Treasury and investment grade corporate debt.

The Oppenheimer analysts expect solid overall third-quarter results, helped by continued strong demand for wireless and wireline broadband. Their channel checks also suggest strong demand for cloud services. The Oppenheimer stocks to buy are rated Outperform, and the analysts raised their earnings estimates.

AT&T Inc. (NYSE: T) has to be one of the most ignored dividend plays on Wall Street. While growth has been admittedly slower over the past few years, the company continues to expand its user base, and strong product introductions from smartphone vendors have not only driven traffic but increased device financing plans. That is an area that the Oppenheimer team believes could lead to some earnings weakness.

AT&T shareholders are paid an incredible 5.4% dividend. The Oppenheimer price target for the stock is $42, and the Thomson/First Call target is much lower at $36. Shares closed Friday at $$34.08.

ALSO READ: Merrill Lynch’s Beaten Down Biotech Stocks With Huge Upside Potential

Comcast Corp. (NASDAQ: CMCSA) is one of the top consumer cable and entertainment names on Wall Street. Now the largest cable company in the United States, Comcast continues its push to be a top entertainment name. The Oppenheimer analysts, along with many on Wall Street, think 2014 and 2015 will be banner years for the entertainment giant, with continued strong pricing power, advertising spending growth and new digital platforms. Comcast shareholders recently approved the gigantic purchase of Time Warner Cable, and regulatory approval is expected to follow.

Comcast investors are paid a 1.8% dividend. The Oppenheimer price target is $62. The consensus target is $63.63. Comcast closed Friday at $50.68 a share.

T-Mobile US Inc. (NYSE: TMUS) is a stock in which offers and rumors continue to fly around Wall Street. With the Sprint deal off the table, and the bid for 56% of the company from Iliad also gone, the stock was hit, and hit hard. The question is will somebody else make a play for the company? While most on Wall Street didn’t expect the Iliad bid to be accepted at the low $33 price target, they do feel that after the stock got hammered, huge value may be there for patient investors. The iPhone 6 launch has been a solid boost for T-Mobile’s momentum, as many consumers were holding off on switching wireless providers, waiting for the next bigger and better model to be released.

The Oppenheimer price target is $37, and the consensus on Wall Street is posted at $35.78. Shares closed trading on Friday at $26.11.

ALSO READ: 5 Top Stocks to Buy With Big Catalysts This Week

All three of these top stocks to buy offer investors incredible value at current price levels. They are also suitable for growth-oriented portfolios that have a degree of risk tolerance.

About the Author Lee Jackson →

Lee Jackson has covered Wall Street analysts' equity and debt research and equity strategy daily for 24/7 Wall St. since 2012. His broad and diverse career, which included a stint as the creative services director at the NBC affiliate in Austin, Texas, gives him unique insight into the financial industry and world.

Lee Jackson's journey in the financial industry spans over 30 years, with nearly two decades as an institutional equity salesperson at Bear Stearns, Lehman Brothers, and Morgan Stanley. His career was marked by his presence on the sell side during pivotal Wall Street events, from the dot.com rise and bubble to the Long Term Capital Management debacle, 9/11, and the Great Recession of 2008. This is a testament to his resilience and adaptability in the face of market volatility.

Lee Jackson’s practical financial industry experience, acquired from a career at some of the biggest banks and brokerage firms, is complemented by a lifetime of writing on various platforms. This unique combination allows him to shed light on the intricacies and workings of Wall Street in a way that only someone with deep insider experience and knowledge can. Moreover, his extensive network across Wall Street continues to provide direct access for him and 24/7 Wall St., a privilege few firms enjoy.

Since 2012, Jackson’s work for 24/7 Wall St. has been featured in Barron’s, Yahoo Finance, MarketWatch, Business Insider, TradingView, Real Money, The Street, Seeking Alpha, Benzinga, and other media outlets. He attended the prestigious Cranbrook Schools in Bloomfield Hills, Michigan, and has a degree in broadcasting from the Specs Howard School of Media Arts.