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Top Telecommunications Companies Preparing for 5G Rollout

Melisa R. H. Posted On March 26, 2019
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The telecommunications sector is composed of companies that provide communication through wired and wireless infrastructure. Some companies are considered both income and growth stocks, due to their strong performance, regulatory protection and good dividends.

The latest generation of cellular mobile communications, 5G, is rolling out, and these companies are preparing to offer high data rate, reduced latency, cost savings and energy saving. Innovations like this contribute to the growth and success of the industry.

Furthermore, telecommunications is considered a defensive stock, as the demand remains steady in times of economic stress and subscription plans give a stable source of revenue.

📱 Telecommunications

BCE Inc. (BCE-T)
The holding company for Bell Canada group. They’re almost done their fibre to home that will give them more market share. BCE is the dominant player in this space and they pay a 5.5% dividends. They are well managed and are considered a good defensive stock that will weather a recession.

BCE Inc. (BCE-T) — Stockchase
BCE Inc. (BCE-T) — Stockchase

Opinion about BCE-T: Now is probably the time to buy if you want to take a position. At $30 it is reasonably cheap. He likes the dividend cut which gives it financial flexibility and the opportunity to pay down debt. The dividend is still quite high at 6% and is stable. Market fears are somewhat…

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Telus Corp (T-T)
One of the three big Canadian telecom company. They beat subscriber growth and reduced churn in Q4. They’ve increased dividends by 7% and is projected to increase. They have invested in data and are increasing their free cash flow.

Telus Corp (T-T) — Stockchase
Telus Corp (T-T) — Stockchase

Opinion about T-T: T vs. BCE Become differentiated when you drill into the metrics. Both suffering from credit downgrades. Took on a lot of debt for 5G buildout, but weren't able to increase pricing. Number of immigrants has slowed. Lots of price competition, just as elsewhere in the world.In last quarter, increased dividend. Less risky…

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Shaw Communication (B) (SJR.B-T)
A Canadian telecommunications company that has extensive fibre optic network that provides telephone, internet, tv, and mobile services. They are expected to get get a good market share of 5G. They pay a 4% monthly yield.

Shaw Communication (B) (SJR.B-T) — Stockchase
Shaw Communication (B) (SJR.B-T) — Stockchase

Opinion about SJR.B-T: It comes down to the Rogers deal, which the street thinks will happen, but this is the fourth deadline extension. The deal has been priced into shares, so there isn't much upside. Better to buy Rogers or Telus than Shaw.

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Rogers Communications (B) (RCI.B-T)
A telecom leader that also owns media. They pay a good dividends that is expected to be increased. I has organic growth and some say the media assets are undervalued. They have the largest wireless network in Canada and is considered a defensive growth name.

Rogers Communications (B) (RCI.B-T) — Stockchase
Rogers Communications (B) (RCI.B-T) — Stockchase

Opinion about RCI.B-T: (A Top Pick May 09/24, Down 27%) He still likes it and would buy more. High immigration is a tailwind since there are more customers for telecom. Cost cutting is going on and new technology is being implemented. There is lots of free cash flow and along with lower interest rates this…

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Quebecor Inc (B) (QBR.B-T)
A Quebec based communications company that has seen earning growth of over 20%. The growth has been exponential and the company is managed well. Their main area served is limited to Quebec, and are investing in their network.

Quebecor Inc (B) (QBR.B-T) — Stockchase
Quebecor Inc (B) (QBR.B-T) — Stockchase

Opinion about QBR.B-T: (A Top Pick Jan 23/24, Up 3%) Benefiting from the Freedom Mobile purchase. Able to expand in Ontario and Western Canada without deploying too much capex. Very high ROE and free cashflow, allowing them to lower debt and obtain investment-grade rating on bonds. Aggressively buying back shares. Best-performing telecom stock this year.

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Telefonica S.A. (TEF-N)
An international telecommunications company based in Spain. Revenues rose in 2018, and they are expecting a 2% organic in revenue. They sold their mobile communications assets in some central American countries back in February.

Telefonica S.A. (TEF-N) — Stockchase
Telefonica S.A. (TEF-N) — Stockchase

Opinion about TEF-N: It's a telecom, which is the worst industry to ever invest in. Telecoms are being swept into the new communication industry which will also include media, cable and internet search. The telecom industry will cease to exist. He's not intersted in telecoms at all. It's crazy. He once paid for long-distance calls;…

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AT&T (T-N)
One fo the oldest telecommunications company. They have consistently raised dividends for the past 30 years and own 1/3 of the wireless market share in the U.S. They are considered lower risk than their European counterpart.

AT&T (T-N) — Stockchase
AT&T (T-N) — Stockchase

Opinion about T-N: Long-term outlook is hard to say. Stock's doing well by putting 2 satellite companies together, thereby creating value. He owns a bit. Big run in a short time.

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AMERICA MOVIL, S.A.B. DE C.V. (AMX-N)
A Mexican telecommunications corporation that is the fourth largest mobile network operator. Their share price jumped following their acquisition of Nextel’s Brazil operation giving them a strong position in Latin America.

AMERICA MOVIL, S.A.B. DE C.V. (AMX-N) — Stockchase
AMERICA MOVIL, S.A.B. DE C.V. (AMX-N) — Stockchase

Opinion about AMX-N: (A Top Pick June 5/07. Down 8%.) Largest cellular company in Mexico. Their capacity utilization of the network is superior to many other global ones. Very Bullish on this stock.

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Vodafone Group PLC (VOD-Q)
The United Kingdom’s largest telecom company that offers voice, broadband and data services. Most of their business is in Europe. Due to them being a UK-based company, Brexit talks have negatively affected this stock. They are facing big capital expenditures with 5G but their dividends are considered safe.

Vodafone Group PLC (VOD-Q) — Stockchase
Vodafone Group PLC (VOD-Q) — Stockchase

Opinion about VOD-Q: Acts like a utility and pays a reasonable yield. But don't get too excited. The age of telcos with lots of growth are past.

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Verizon Communications (VZ-N)
They are the largest telecommunications company in the U.S. and operates internationally. They pay an attractive dividends of 4.2% and their balance sheet looks good. 5G infrastructure will make it a good long term story.

Verizon Communications (VZ-N) — Stockchase
Verizon Communications (VZ-N) — Stockchase

Opinion about VZ-N: Verizon and AT&T have good yields and reporting better-than-expected earnings. Their businesses have little cyclicality.

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T-Mobile US (TMUS-Q)
They recently launched their home internet pilot in the US for rural and underserved markets.. They are seeking a merger with Sprint on the grounds that wireless telecommunications and cable are coming together. If this goes through, it could see major upsides.

T-Mobile US (TMUS-Q) — Stockchase
T-Mobile US (TMUS-Q) — Stockchase

Opinion about TMUS-Q: The US is seeing a rotation to the old-school telecom names (haven't seen this in Canada). In his rankings, the #1 US large-cap stock right now. Steadily improving, very well supported. Held in really nicely recently when a lot of the cyclicals fell. Yield is 1.35%. (Analysts’ price target is $263.46)

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Sprint Nextel (S-N)
A U.S. telecommunications holding company. They just announced a merger with T-Mobile, and its consolidation is seen positively by experts. Sprint does not pay a dividend.

SentinelOne Inc. (S-N) — Stockchase
SentinelOne Inc. (S-N) — Stockchase

Opinion about S-N: Trevor Rose’s Insights - Trevor’s most-liked answers from 5i Research EPS of 4c beat estimates of 1.2c; revenue of $225M beat estimates of $222M. Still, F2026 forecast was lowered: to sales $1.01B from estimates $1.03B. Margins to 78.5% from 79.3%. Q1 sales to $228M from $235.6M estimated. Most brokers re-iterated their ratings.…

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China Mobile Hong Kong (CHL-N)
A Chinese state-owned telecommunication company. They have grown their dividends reliably. There is still growth opportunity in China but it’s still a mature business. They have a good balance sheet and is a good long-term investment.

China Mobile Hong Kong (CHL-N) — Stockchase
China Mobile Hong Kong (CHL-N) — Stockchase

Opinion about CHL-N: You need to ask your financial institution as to what you can do with your ADR holdings, now that Trump black listed some Chinese stocks. It is not a great thing that happened here. This stock still trades in Hong Kong. It's been a giant disappointment. It would make sense for it…

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