The term “big winners” rarely comes to mind when discussing telecom stocks. That’s because of their weak, long-term performance compared to growth, real estate, and retail stocks. However, the downturn of late 2021 and 2022 has turned most telecom stocks into massive value plays. And value plays are precisely what investors are looking for in a volatile environment.

Heading into 2023, the high possibility of a recession still has many investors entrenched in defensive stocks. Conversely, the strong labor market and the fact that many oversold stocks are showing signs of recovery should not be overlooked.

Oversold telecom stocks are highly compelling as many are not only at historic lows, but they offer high dividend yields and pose little risk. They also have strong backing from Washington and promising prospects due to their well-established customer bases. Once the market turns a corner, these telecom stocks will likely surge above their pre-pandemic prices as investors realize their strong potential.

With that in mind, let’s look at three telecom stocks that are very well-positioned at this point.  

Verizon (VZ)

Verizon (NYSE:VZ) is undoubtedly the best telecom stock to buy. It enjoys some crucial advantages compared to many of its competitors.

Verizon shines as the top carrier against competitors AT&T (NYSE:T) and T-Mobile (NASDAQ:TMUS). As of December 2022, it had the most customers overall and the broadest coverage map.

On the other hand, It is important to note that AT&T and T-Mobile are in a stronger position than VZ when you filter that coverage down to just 5G. T-Mobile currently offers the fastest speeds with 5G coverage, earning it praise from experts.

However, Verizon has already shown that it is a strong leader in the telecoms space and no doubt will be able to catch up when it comes to 5G. As it weathers the competition and expands its 5G coverage, it will end up on top.

Meanwhile, VZ offers a dividend yield of 6.47% with a price-earnings ratio of eight times, while the company grew its top line by 4% in Q3 and 3.5% last quarter. Although VZ’s profits declined slightly last year, that downturn won’t have a long-term impact on VZ stock.

That’s because, once Verizon’s year-over-year comparisons ease, the company’s profits will rise YOY again and investors will become more confident in VZ stock.

Altice USA (ATUS)

Wall Street has mixed feelings about Altice USA (NYSE:ATUS) due to its massive debt. Its total long-term debt is $26.1 billion, while its total liabilities amount to $36.2 billion. Investors see having this much debt in a rate-hike environment as a “no-no,” and its risk of bankruptcy is estimated at 48%. Therefore, I would only recommend buying ATUS if you are confident that the Fed will stop raising interest rates this year.

Nonetheless, almost all of Altice’s weaknesses are priced into its stock at the moment, and its strengths can help ATUS stock rally when they are more widely  recognized.

Taking a look at its strengths, the growth of its fiber segment is accelerating, reaching 31,000 net additions in Q3, up from 14,000 in Q3 2021, and the unit is generating considerable cash flow.

Its price-earnings ratio of 3.5 times also makes the risk posed by the stock negligible, and less hawkish monetary policy this year can make it surge. 

Telenor (TELNY)

A company that has many similarities to Verizon is Norway-based Telenor (OTCMKTS:TELNY). The company’s market share in the Nordic countries of Finland, Sweden, Denmark, and Norway is considerable, and it is also dominant in a number of emerging Asian countries.

Telenor owns a 56% stake in Bangladesh-based Grameenphone, which dominates telecommunications in the country with a 46.3% market share. It entirely owns Telenor Pakistan, with a 27.6% market share, CelcomDigi in Malaysia, with a 33.1% stake and a 21.6% market share, and it has  a 30% stake in True Corporation, which has a  market share of 33.6%in Thailand.

This heavy exposure to developing countries gives Telenor a great deal of room to grow. Indeed, the company’s revenue has surpassed analysts’ average expectations for the past year.

Further, Telenor has a compelling dividend yield of nearly 9%. As the company’s margins improve due to more favorable macro conditions, I think that TELNY stock can climb meaningfully over the long term.

On the date of publication, Omor Ibne Ehsan did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.