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4 Telecom Stocks to Weather a Strong Dollar

By U.S. News & World Report

Much has been made over the last quarter about how the strong dollar has hurt U.S. company earnings. Companies with significant overseas operations see their earnings diminished when they are converted back to U.S. dollars. In the past 12 months, the U.S. dollar has gained approximately 20 percent versus the euro and has made similar gains against other major currencies like the yen.

Meanwhile in Europe, talks to reach a new debt deal for Greece remain deadlocked. A possible outcome if a deal is not reached is that Greece could exit the euro — an unprecedented event. Such a scenario would no doubt put more downward pressure on the euro and conversely exert upward pressure on the U.S. dollar.

Some sectors of the market are more exposed to a strong dollar than others. For example, the information technology sector derives 57 percent of its revenue from outside the U.S. Some sectors, however, derive almost no revenue from outside the U.S. — telecoms and utilities are two examples. These sectors are relatively well-insulated from the effects of a strengthening U.S. dollar.

The screen. We used Recognia Strategy Builder to search for U.S. telecom stocks that offer some protection in the event of a continued rise in the U.S. dollar. We began by setting a minimum market capitalization threshold of $5 billion. We searched for larger and more stable companies in the market.

Strong and stable dividend yields are one of the significant attractions of telecom stocks.Therefore, we screened for stocks with indicated annual dividend yields of at least 2.5 percent.

Finally, to ensure we don’t overpay for our investments, we screened for companies with reasonable forward price-to-earnings ratios based on analyst estimates. We selected only companies with forward P/E ratios of 30 or less. Here are the results:

CenturyLink, headquartered in Monroe, Louisiana, is the third-largest telecom provider in the U.S. in lines served, behind AT&T and Verizon. The company operates as a local exchange carrier, an Internet service provider, and it also provides long distance service. CenturyLink makes our list with a very strong dividend yield of 6.5 percent and a reasonable forward P/E ratio of just 13. In early May, the company announced first-quarter results, which beat analyst estimates on earnings but missed narrowly on revenue.

AT&T is a household name in the U.S. and throughout the world. AT&T is the largest provider of fixed line telephone services in the U.S. and the second-largest provider of wireless service. AT&T has long been a favorite of conservative investors due to its strong and consistent dividend, currently sitting at $1.88 per share or 5.4 percent yield. In 2014, AT&T announced an agreement to purchase satellite operator DIRECTV. Regulatory approval of this merger is still pending.

Verizon Communications is the largest telecom company in the U.S. by market capitalization, with an enterprise value of over $200 billion. Verizon is also the largest wireless provider in the U.S. On May 12, Verizon announced it would acquire AOL for approximately $4.4 billion. This news received mixed reviews in the financial community, and the stock has since declined slightly. With a dividend yield of 4.4 percent and an extremely reasonable forward P/E of 13.5, Verizon is an attractive long-term investment that is well-insulated from a strengthening U.S. dollar.

Frontier Communications, based in Stamford, Connecticut, is the nation’s fifth-largest telecom company. Frontier’s stock has struggled since February, when it announced a plan to buy over $10 billion of Verizon wireline assets. The stock has declined over 22 percent so far this year. This sharp decline has left the stock with a very attractive dividend yield of 8.2 percent — the highest of any company on our list. Frontier has more risk as an investment than some of the other companies on this list, but it may reward a patient investor in the long term.

Historical performance. Recognia Strategy Builder provides a backtesting capability to evaluate how well an investing strategy would have worked in the past. Using a five-year historical period with quarterly rebalancing, the screen described in this article had a 13.8 percent annualized return, compared with 14.3 percent for the Standard & Poor’s 500 index and 12.5 percent for the Dow Jones industrial average.

The investment ideas presented here are for information only. They do not constitute advice or a recommendation by Recognia Inc. in respect of the investment in financial instruments. Investors should conduct further research before investing.

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4 Telecom Stocks to Weather a Strong Dollar originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
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