5G network has high business, economic, and marketing expectations worldwide. 5G stocks could be among the top growth stocks to monitor as this 5G technological revolution could support many new trends such as IoT (internet of things), big data, and smart cities.
Big data especially is a very promising technological field. From autonomous driving to education, health care, e-commerce, and telecom applications and business solutions the 5G network is increasing rapidly. But it will take some time for this technology to be globally available, at least four or five more years.
Here are 4 5G stocks to monitor for the future:
The following 5G stocks are top growth stocks that can benefit from the widespread adoption of this improved wireless technology, having a competitive advantage in its industry and an economic moat.
5G Network Business Outlook is Very Promising
A Market Research Future report on Global 5G Technology Market is optimistic about the bright prospects of the 5G network:
“Global 5G Technology Market size is expected to expand at 70.83% CAGR over the forecast period (2020-2025), asserts Market Research Future (MRFR) in its latest report. It is expected to exceed a valuation of USD 700 Billion by 2025. 5G technology is expected to pave open new avenues of communication and support new mediums such as video communication and satellite communication in remote areas. The new spectrum bands and approvals for construction of infrastructure can be viewed as growth engines for the market during the forecast period.”
That’s compared to the sector’s 2020 market size of $580 million. That means big opportunities for investors to multiply their money.
5G Stocks for the Future: Qualcomm (QCOM)
“Qualcomm is the global 5G intellectual property leader” to hear them tell it, and the company has a very smart, effective, and money-making business plan. It has a vast and expanding list of 5G intellectual property licensing and collects royalties and retuning income for the use of its products and technologies from a plethora of other companies.
Take for example the next stock on our list, Apple, and the link between these two companies. The latest iPhones with 5G technology use parts from Qualcomm. In the past, Qualcomm has been sued over its licensing practices and even monopolistic behavior by regulators across the globe. This should be negative news for the stock.
But Qualcomm is expected to continue to deliver plenty of growth and economic value to its shareholders in the next years. Zacks estimates a three-to-five expected EPS growth of 19.85% for QCOM stock. And with a forward dividend of $2.60 and yield of 1.90%, the stock provides income for passive investors too.
Apple is a leader in mobile phones and has consistently high profitability and a very loyal global clientele. In one of my recent articles, I wrote something very obvious, yet so key to Apple’s economic outlook: when it comes to non-Android smartphones, there is only Apple to consider.
The new 5G iPhone 12 family seems to be working very well as Apple’s iPhone revenue grew 17% year over year to a quarterly record of $65.6 billion. As more iPhone users switch to the new models with the 5G technology, I am optimistic about the future growth of revenue and profitability for AAPL stock. Yes, there could be a slowdown in the future sales growth, but profitability and positive free cash flows are very strong right now.
For Apple having such strong competition from many other companies selling much cheaper smartphones, an expected three-to-five-year EPS growth of 11.50% is remarkable. I expect Apple to continue to be a leader in 5G mobile communication.
T-Mobile is among the largest U.S. wireless carriers. After closing its merger with Sprint, T-Mobile is now focused on developing a truly nationwide 5G network.
“T-Mobile is the leader in 5G coverage and speed. No one else covers more Americans with the fastest 5G. The choice is clear.”
It might be a marketing statement, but the potential for T-Mobile to be a leader in 5G technology is both real and present. The aforementioned merger will create the infrastructure and economies of scale that are necessary to develop and support the 5G network.
Meanwhile, the company has delivered growth for revenue, operating income and EPS over the past 10-year period with averages of 32.60%, 26.35% and 9.39% respectively according to MorningStar.
If subscriber growth continues due to its 5G network’s competitive advantages of coverage and speed in the U.S., the prospects for TMUS stock look very positive.
American Tower (AMT)
American Tower Corporation isn’t just any REIT, but one of the largest REITs in the world. And it has a strategic position for the future of the 5G network.
AMT is a provider of wireless communications infrastructure, offering both solutions and services that are vital to support global wireless networks. According to the company, this infrastructure business covers 22 countries located on six continents.
The company states that its “global portfolio of approximately 186,000 sites is composed of towers in advanced, evolving and developing wireless markets, in various stages of wireless network deployment.”
With this REIT company, investors should expect an attractive dividend yield over time and the forward dividend and yield are $4.84 and 2.32% respectively. Infrastructure is a key business aspect of the 5G network and AMT is positioned for future growth supporting this technological revolution.
On the date of publication, Stavros Georgiadis, CFA, did not have (either directly or indirectly) any positions in the securities mentioned in this article.