The revolution is happening, so why not find a way to make money on these seven 5G stocks to buy right now?
Don’t kid yourself, there will be a lot of companies vying for position in the 5G revolution, but only a select few will actually have a pole position at the front of the line.
As an investor, you want to find those companies and figure out what makes them worth investing in before the 5G revolution comes to fruition.
What is the 5G Revolution?
Before we get into the seven 5G stocks to buy right now, it’s good to have a primer on exactly what 5G technology really is.
The “G” in 5G means generation. Essentially, this is the fifth generation of mobile wireless connectivity. It means faster connections, better wireless connection stability and much lower latency (lag time) in that connection.
Basically, the intent of 5G technology is to create faster wireless connections that allow smartphones (or really anything else with wireless connectivity) to be faster and more efficient.
It has the potential to transform how we do business as more than 65% of companies plan to find a way to deploy 5G technology in 2020, according to a study by Gartner.
High-end estimates project 5G connections to be 10 to 20 times faster than the current 4G LTE connections we enjoy right now. To put that in perspective, download speeds using 4G connections average about 20 Mbps. With 5G, that is expected to go up to 500 Mbps to 1,500 Mbps.
You’ll be downloading movies in seconds, rather than minutes.
As you can see, when 5G is rolled out, it is going to take off like gangbusters. Companies who are in on the revolution stand to make a lot of money.
But more importantly, those who invest in those companies stand to make a lot of money as well.
5G Stocks to Buy Right Now
1. Ericsson ADR
Market Capitalization: $29 billion.
Annual Dividend Yield: 0.74%.
Analyst Ratings: 3 Strong Buy, 0 Moderate Buy, 2 Hold, 0 Moderate Sell, 0 Strong Sell.
Swedish-based Ericsson ADR (Nasdaq: ERIC) is one of the world’s leaders in developing products for telecom and data communications.
It will be one of the companies on the front lines for the 5G rollout as it supplies telecom companies with network upgrades, radio network hardware and software. Also, the fact that Ericsson is a direct competitor with Chinese-based Huawei doesn’t hurt either.
Ericsson is also planning to partner with TDC to launch the first 5G network in Denmark, which could serve as a test case for other 5G networks across the globe. It is also working with the Kingdom of Saudi Arabia to upgrade government and private sectors to 5G capability.
It is currently trading at just under $9 a share, making it extremely affordable, especially for a new trader who might not yet have a ton of cash to invest.
Its price is still well above its 52-week low of $7.58 and short of its 52-week high of $10.46, giving it a lot of cushion for an upward swing in 2020. The stock price has risen by 9.6% in three months and is poised for more growth.
In terms of earnings estimates, Ericsson is poised to blow the doors off its 2019 numbers by as much as 1,300%.
Ericsson’s position on the front lines of 5G technology and its strong potential make it one of our 5G stocks to buy right now.
2. Crown Castle International Corp.
Market Capitalization: $58 billion
Annual Dividend Yield: 3.4%
Analyst Ratings: 4 Strong Buy, 1 Moderate Buy, 7 Hold, 0 Moderate Sell, 0 Strong Sell.
One big way to get into the 5G revolution is to find that one thing companies can’t live without.
In terms of 5G, anyone installing a network is going to need cell towers and Crown Castle International Corp. (NYSE: CCI) is a real estate investment trust that owns, operates and leases cell towers and small cell networks.
Their holdings are all over the United States and into Puerto Rico, meaning their real estate holdings are diverse geographically, which is a good thing.
Crown Castle’s stock price is around $140 a share — well below its 52-week high of nearly $150, but still 31% better than the low. It’s next closest resistance point is at $142 then $143, meaning there is wiggle room even before it reaches its resistance point.
Bear in mind, it is likely this stock, like many of the others listed here, that will take off once investors realize the 5G rollout is imminent, which could be later in 2020. Oh, and another cool thing about CCI … it currently pays out a 3.4% dividend!
Again, CCI has what companies want and, more importantly, need — tower space. Once the 5G revolution shifts into high gear, CCI share price is likely to skyrocket.
Because it has the one thing 5G companies can’t live without, Crown Castle International Corp. is one of the 5G stocks to buy right now.
3. Vmware Inc.
Market Capitalization: $63 billion.
Annual Dividend Yield: 0%.
Analyst Ratings: 13 Strong Buy, 2 Moderate Buy, 5 Hold, 0 Moderate Sell, 1 Strong Sell.
Products companies will need to implement 5G will range from both hardware to software.
One software developer that will profit big from the 5G revolution is Vmware Inc. (NYSE: VMW). Vmware, based in Palo Alto, California, makes the software that carriers will need to run on multiple networks at the same time on the same hardware.
They have deals in place with the aforementioned Ericsson as well as AT&T and Vodafone.
Financially, Vmware is trading around $152 per share — well below its 52-week high of more than $205 … and above its low of $128. It has a lot of maneuverability in price with massive upside potential.
Analysts believe now is a good time to get into Vmware as the price is set just right before takeoff.
The company’s earnings estimate for the next year is between 3% and 6% better than 2019, with means, the belief is Vmware is going to jump … it’s just a matter of when.
Because analysts believe now is a good time to get in and its current price is at a nice level compared to where it can go makes Vmware one of the 5G stocks to buy right now.
4. Ciena Corp.
Market Capitalization: $6 billion.
Annual Dividend Yield: 0%.
Analyst Ratings: 10 Strong Buy, 2 Moderate Buy, 2 Hold, 0 Moderate Sell, 1 Strong Sell.
Another company that is in line to benefit from the 5G push is another telecom equipment manufacturer.
Maryland-based Ciena Corp. (NYSE: CIEN) supplies telecom networking equipment, software and services to companies all over the world. It specializes in using optical connections to build out small- and large-scale networks.
Thanks to a drop-off in November and December, Ciena Corp. is positioned nicely in terms of price. At around $41 per share, Ciena is well off its mean analyst price target of $49 — giving it a strong upside for the future.
The company has increased sales in each of the last five years, including a nearly $500 million jump from 2018 to 2019. In fact, 2019 was the company’s second-best year since 2015 in terms of net income.
Analysts have Ciena Corp as a buy now because of its solid price and its potential to continue growth as 5G starts its rollout.
That is why Ciena Corp. is one of the 5G stocks to buy right now.
5. Cisco Systems Inc.
Market Capitalization: $202 billion.
Annual Dividend Yield: 2.93%.
Analyst Ratings: 13 Strong Buy, 2 Moderate Buy, 5 Hold, 0 Moderate Sell, 0 Strong Sell.
Another big component of the 5G revolution is security against data seepage and connections.
For that, many 5G installers may look to Cisco Systems Inc. (Nasdaq: CSCO) for hardware and software designed to protect connections and networks worldwide. It’s fiscal 2019 was the best in five years in terms of sales and net income.
The company recently unveiled its Cisco 5G Power x, which is architecture any cellular, Wi-Fi or internet protocol can use (according to its website).
Cisco stock trades at right around 18 times forward earnings and analyst estimates suggest those earnings will grow around 3% in 2020. Of course, that could be even more depending on how it rolls into the 5G marketplace.
Shares of the company are currently trading at around $47, but have been as high as $58. Cisco is trading at 4.2% above its 52-week average, but there is a lot of room left for it to grow.
Another big upside to Cisco is that the company pays a dividend to its shareholders. Its annual dividend yield is 2.93% and the company paid out a $0.35-per-share dividend in 2019.
Because of its strong dividend payout and the fact that its share price could see a huge jump with the 5G rollout, Cisco Systems is one of the 5G stocks to buy right now.
6. AT&T Inc.
Market Capitalization: $285 billion.
Annual Dividend Yield: 5.2%.
Analyst Ratings: 7 Strong Buy, 2 Moderate Buy, 5 Hold, 0 Moderate Sell, 1 Strong Sell.
The biggest winners of the 5G revolution will likely be the companies that offer 5G service to businesses and consumers. For that, in the United States, there will be three or four and that’s about it.
It won’t necessarily matter which one is first, it will matter which is more diverse and with the least amount of headaches when that service is rolled out.
Now, AT&T Inc. (NYSE: T) is likely the biggest player in the field.
AT&T is affordably priced for any investor. Currently, it trades at around $39 per share but has dipped to less than $30. It has been on a steady rise since falling off earlier in 2019.
Its one-year return growth is around 27%, but what makes AT&T stand out above the other potential 5G network providers is the dividend.
AT&T pays out a massive 5.2% annual dividend yield. In 2019, the company paid out $0.51 per share in dividends.
So, because it’s affordable, a legacy, on an upward path, pays a strong dividend and will likely be the largest 5G network provider in the United States, AT&T is one of the 5G stocks to buy right now.
7. Intel Corp.
Market Capitalization: $260 billion.
Annual Dividend Yield: 2.1%.
Analyst Ratings: 7 Strong Buy, 1 Moderate Buy, 12 Hold, 1 Moderate Sell, 5 Strong Sell.
If you own a computer … any computer … it’s likely you have a microprocessor made by Intel Corp. (Nasdaq: INTC).
That’s for good reason. Intel is one of the world’s largest providers of microchips. However, it has since become more diversified — getting into data centers and the Internet of Things — making it a very attractive company for the 5G revolution.
Some of its technology will be used for artificial intelligence, cloud computing and other data-centric applications. And it’s 5G applications will likely power all of that.
The company also announced its plans to invest more in its 5G network infrastructure business, adding to its attractiveness in the 5G space.
Financially, the company has bested earnings estimates in all of 2019 — by as much as 19%. Intel stock is trading at a forward price-to-earnings ratio of 12.9, which is below the five-year average of just under 16.
Shares are trading at around $59 per share, which is above its analyst mean target of $56.
However, like AT&T, what sets Intel apart from others is its dividend. It has paid an annual dividend yield of 2.1%. In 2019, the company’s dividend was $0.31 per share — up from $0.30 per share a year prior.
Intel has positioned itself to go beyond being just a microprocessor company and has started to leverage itself for 5G. That, and its regular dividend makes it one of the 5G stocks to buy right now.
The 5G Train is Coming
Now is the best time to get into a sector we all know is coming but has not yet arrived.
The 5G revolution is going to make a lot of people a lot of money and, as an investor, you should try to be one of them.
But like with any investment, do your own homework and don’t invest more than you are willing to lose.
The 5G market is going to be fluid for a while and even geopolitical forces will be at play until the rollout is set.
But if you know your tolerance, have realistic expectations and are smart about your investment, the sky could be the limit.
Our list is based on companies with strong upward potential, a unique position in the 5G realm and/or offer solid financials.
That is what put them on our list of the 5G stocks to buy right now.
Make sure you check out our other resources: