Needless to say, the telecom and content revolution, which has been spurred on by the leaps and bounds in the wireless industry, are changing the way everything is viewed and packaged now. The days of the cable company or satellite provider dictating which content will be presented are over, as over-the-top streaming of programming has become a huge force in the industry.

A new research report from Goldman Sachs makes some observations on companies that participated in the firm’s Communacopia Conference, and the firm is quite positive on four of the stocks. All are rated Buy and one is on the firm’s prestigious Conviction Buy list.

Altice USA

This is the one that makes the Goldman Sachs Conviction Buy list, and it is well regarded across Wall Street. Altice USA Inc. (NYSE: ATUS) is the fourth-largest cable company in the United States. It offers broadband, video and telephone service to 8.5 million homes and currently providing services to 4.9 million homes across 21 states, though the vast majority, roughly 75%, of the footprint is in New York and Texas.

In addition to residential services, Altice USA also offers a variety of services for business customers, as well as data-driven advance advertising capabilities. Goldman Sachs noted this in the research report:

Altice USA continues to successfully execute on a number of initiatives, including the rollout of Altice One, upgrading the network to all fiber, and launching a wireless offering in 2019. The company remains committed to video, which is still views as a core product, and it is outperforming the overall pay-tv market in terms of video revenue generating unit declines (noting it has not seen an acceleration in Optimum customer disconnects). In broadband, the company expects to achieve double-digit growth in average revenue per user for the next few years driven by increasing customer demand for data and speed. ATUS’s main priority for capital allocation remains cable M&A, reiterating that its next best use of capital, given where the share price is today, is to buy back stock.

The Goldman Sachs price target for the stock is $25, while the Wall Street consensus target is $25.61. The shares closed trading on Friday at $19.00.

Charter Communications

This top cable giant has been linked to Verizon in takeover chatter in the past. Charter Communications, Inc. (NASDAQ: CHTR) is a leading broadband communications company and the second-largest cable operator in the United States. It provides a full range of advanced broadband services, including Spectrum TV video entertainment programming, Spectrum Internet access and Spectrum Voice.

Spectrum Business similarly provides scalable, tailored and cost-effective broadband communications solutions to business organizations, such as business-to-business internet access, data networking, business telephone, video and music entertainment services and wireless backhaul.

The company made a huge investment in Time Warner Cable, and the analysts noted this:

Charter is tracking well on its integration, which will enable all of its product offerings, pricing, packaging and service operations to be universal across its footprint. By the end of the year, the company plans to finish converting the remaining analog parts of the cable network to all-digital and upgrading the rest of the broadband network to DOCSIS 3.1. Charter is now 62% complete in its pricing and packaging efforts. Charter is seeing benefits through the prolonged average customer life cycles, and churn going down. The end goal is to create an attractive value proposition to attract and retain customers.

Goldman Sachs has a $373 price target, and the consensus target is $375.76. The shares closed Friday at $318.13.

Crown Castle International

This top tower stock offers incredible growth and income possibilities. Crown Castle International Corp. (NYSE: CCI) is one of the largest U.S. wireless tower companies, with over 40,000 towers across the country. Its core business is leasing space on its wireless towers primarily to wireless carriers, government agencies and broadband data providers.

The company reported solid results and appears to have momentum building through the year, and most expect the second half of 2018 will be stronger than the first half, with growing backlogs across towers, fiber and small cells.

The analysts believe near-term upside to estimates remain, and being in the early innings of 5G network upgrade cycles with leading tower and fiber/small cell portfolios, Crown Castle looks very well positioned. Goldman Sachs noted this from the company’s presentation at the conference:

Crown Castle believes that it is uniquely positioned (as both a provider of both macro towers and small cells) to benefit from the growth of data consumption and the densification of networks. On towers, the company sees robust leasing activity across all four carriers, and specifically noted FirstNet (AT&T) as a key driver. In small cells, Crown Castle entered into a strategic relationship with T Mobile USA Inc. (NYSE: TMUS), which they believe validated two of its cell business model: 1) that there is accelerating demand for small cells in new markets, and 2) there is a desire to densify (co-locate) in current markets. The company reiterated their guidance for 7%-8% growth in the dividend for the foreseeable future, and plans to investing approximately $1.5 billion a year in growing the business.

Investors receive a 3.76% distribution. The $119 Goldman Sachs price objective compares with a $117.47 consensus target. The stock closed Friday at $111.55.

Verizon Communications

This top telecommunications company offers tremendous value. Verizon Communications Inc. (NYSE: VZ) is a global leader in delivering the digital world. Verizon Wireless operates America’s self-described most reliable wireless network, with 109.5 million retail connections nationwide. Verizon also provides converged communications, information and entertainment services over America’s most advanced fiber-optic network, and it delivers integrated business solutions to customers worldwide.

Verizon reported better-than-expected second-quarter results as the company finished out the first half of 2018 strong. It enjoyed a total of 531,000 retail postpaid net additions, which includes 398,000 postpaid smartphone net adds. That total also includes tablet losses of 37,000 but additions of 369,000 other connected devices (mostly wearables). The carrier’s retail postpaid phone churn was much lower than overall retail churn at just 0.75%.

The report said this when discussing the big picture at the company:

Verizon remains focused on its core strategy of having the best wireless network in the United States and on successfully deploying and capitalizing on the opportunities of 5G. The company announced that it was the first US wireless carrier to offer a 5G service to consumers via the launch of its fixed wireless product in four cities this week. The company sees mobile 5G coming soon, noting that it is already installing 5G ready enabled equipment on towers today. Verizon remains committed to its previously stated goals of $10 billion in cost cuts, $10 billion in revenue for Oath, and returning to pre-Vodafone leverage levels.

Verizon investors receive an outstanding 4.42% dividend. The Goldman Sachs price target is $60. The consensus target is $56.42, and the stock closed Friday at $54.55.

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The Goldman Sachs team likes these four top stocks after reviewing the companies’ presentations at the recent conference. All make sense for growth accounts looking to add telecom, cable or tower stocks to a portfolio.

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