Senior telecom analysts Christopher King of Stifel Nicolaus and David Dixon of RBC Capital Markets offered investing advice for the telecom sector. (See below for their stock recommendations.)
“Generally, in terms of Verizon and AT&T, [the sector] is still either viewed as a late cyclical or defensive industry, particularly given the strong dividend yields that both names have,” King told CNBC.
“So those two names in general will work better in a choppy to soft economy.”
King said he is not a fan of Sprint Nextel and expects the company to report another earnings loss on Wednesday.
“Sprint continues to struggle from a retail subscriber standpoint,” he said.
“[There are] very little strengthening signs coming out of the company. They are by far the worst performing from an operational standpoint from the U.S. wireless at this point.”
Dixon said Sprint’s network is continuing to improve.
“We’re in a fascinating pivot point in the industry as we focus on data-centric networks going forward,” said Dixon.
“I don’t think there’s going to be many network carriers standing... I think Sprint is very well positioned being ahead of the curve on their 4G rollout and the momentum in the second half is going to be very key outside of this iPhone effect, I think you should expect to see some improving post-paid trend.”
Dixon also said he is a fan of Verizon’s network and strong management team.
“I don’t think you can get away without having the network advantage and the superiority of verizon’s network... I’m really impressed with the management team at Verizon and the focus on the longer-term strategic positioning of the company,” he said.
No immediate information was available for Dixon or King.