At the end of June, the Biden Administration unveiled an ambitious goal to ensure reliable broadband internet access for the entire US, even the most remote rural areas. The project will involve a federal outlay of $42 billion, allocated to the states over the next two years. The President touts the initiative as a move to close the ‘digital gap’ that separates the haves and have-nots in the world of high-speed connectivity.
“It’s the biggest investment in high-speed internet ever, because for today’s economy to work for everyone, internet access is just as important as electricity, water, or other basic services,” Biden said.
For retail investors, the prospect of additional federal money flooding the broadband internet ecosystem will open up opportunities. Broadband internet providers will benefit long-term, as they’ll be the ones building out networks, adding capacity, and enrolling new customers.
So, let’s look at two stocks that are set to reap the rewards of the Administration’s largesse. These are well-known names in the world of broadband service, and according to TipRanks’ database, both hold Buy ratings from the Street’s analyst consensus.
Charter Communications (CHTR)
We’ll start with Charter Communications, a firm that bills itself as a ‘connectivity company.’ Charter provides advanced Wi-Fi, fast internet, and unlimited mobile services to more than 30 million residential and small-to-medium business customers. It also supports services for around 6.6 million mobile phone lines. Charter’s services are branded under Spectrum, and the company launched Spectrum One as its flagship bundled package product this past October.
Charter generated approximately $54 billion in annual revenue last year, based on its 32 million customer relationships. The company has nearly 500 million IP devices connected to its network, which spans across 41 states. In total, there are over 30 Spectrum networks delivering a wide range of content, including local news and sports.
All of this adds up to significant business, and for the last…