Growth stocks have outperformed value stocks significantly over the past decade. And thanks to the coronavirus pandemic, 2020 was also a great year for the class of stocks. Growth companies can increase their revenue and earnings at a faster rate than their industry averages. These are qualities that are rewarded by investors…
Though most growth stocks are trading at lofty valuations now, it still makes sense to many investors to pay a premium to own them because they have the capacity to generate huge returns in the long run based on their continued revenue and earnings growth.
We think that Charter Communications, Inc. (CHTR – Get Rating), Applied Materials, Inc. (AMAT – Get Rating), Baidu Inc. (BIDU – Get Rating) and Activision Blizzard, Inc. (ATVI – Get Rating) are four established players that are well-positioned to keep gaining based on their sound business models and compelling growth drivers.
Charter Communications, Inc. (CHTR – Get Rating)
CHTR is a leading broadband connectivity company and cable operator that serves more than 30 million customers in the U.S. Over an advanced communications network, the company offers a full range of state-of-the-art residential and business services, including Spectrum Internet, TV, Mobile and Voice. The company operates through the following segments – Internet, Video, Voice, Small and Medium Business, Enterprise, Advertising sales, and Mobile.
NBCUniversal and CHTR recently announced a multi-year distribution agreement for NBCUniversal’s full portfolio of broadcast, entertainment, news and sports content in Charter’s Spectrum homes and businesses across 41 states. As part of the new deal, Peacock Premium will be available to Spectrum’s broadband and video subscribers for an extended free trial. Charter also intends to distribute the Peacock app via its Spectrum Guide platform in the future.
CHTR’s revenue and EPS grew at a CAGR of 4.6% and 61.1%, respectively, over the past three years. In its last reported quarter, CHTR’s $12 billion of revenue grew by 5.1% year-over-year, driven by residential revenue growth of 4%, mobile revenue growth of 91.8% and advertising revenue growth of 16.8%. Its total residential and SMB customer relationships increased by 457,000, compared to 310,000 during the same period last year. In addition, the company added 363,000 mobile lines. Its EPS for the quarter came in at $3.90, surging 124% year-over-year.
CHTR is up 11.6% in the past three months. Over the last 12 months, its total customer relationships grew by 6.8% as the company added two million customer relationships. Though consumers are cutting the cord on cable in larger numbers with each passing year, CHTR’s internet and mobile segments are holding strong and likely will continue to do so for the foreseeable future. Analysts expect CHTR’s full-year 2020 revenue and EPS to grow 5% and 89.7%, respectively.
How does CHTR stack up for the POWR Ratings?
A for Trade Grade
A for Buy & Hold Grade
B for Peer Grade
B for Industry Rank
A for Overall POWR Rating.
It is ranked #1 of 13 stocks in the Entertainment – TV & Internet Providers industry.
Applied Materials, Inc. (AMAT – Get Rating)
AMAT is one of the world’s largest suppliers of semiconductor manufacturing equipment that also provides services and software to the semiconductor, display, and related industries. The company’s expertise lies in modifying materials at atomic levels on an industrial scale. It operates through three segments – Semiconductor Systems, Applied Global Services, and Display and Adjacent Markets.
Think Silicon S.A., an AMAT company that is a leading provider of ultra-low power GPU IP for embedded systems, recently announced that it is shipping its updated NEMA® pico XS and NEMA pico XL Multi-Core GPU IP-Series to customers. The series offers architectural innovation that brings performance graphics rendering to the smallest and most power-conservative embedded display devices.
Over the past three years, AMAT has grown its revenue and EPS at a CAGR of…
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