From a trendy tech buzzword, 5G has seen a transition in the last few years to become one of the biggest near-term growth trends on Wall Street. While wireless providers are rolling out 5G networks globally, multinational telecom organization Ericsson has come up with a striking forecast. It predicts that there will be 4.4 billion 5G subscribers by the end of 2027, thanks to the launching of new 5G-enabled devices plus network expansions in North America and China.
For investors looking to play this growth, the telecom sector is a great place to start. Here are two great Canadian options for investors looking to play 5G right now.
Top 5G stocks: BCE
BCE (TSX:BCE)(NYSE:BCE) is a Canadian telecom behemoth, with a market capitalization of more than $60 billion at the time of writing. Indeed, this company doesn’t require introductions.
This leading telecommunications stock has one of the most impressive networks of its peers. BCE’s expansive infrastructure and capital spending plans make BCE a 5G leader in the Canadian market.
Amid growing digitalization, BCE provides high-growth prospects. This company has accelerated its investments to strengthen its broadband and 5G services. The increasing demand and investments can boost BCE’s financials in the next quarters.
The anticipated growth via BCE’s impressive infrastructure is worth noting for growth-oriented investors. However, income-focused investors also benefit. This Canadian Dividend Aristocrat has raised its dividend at a CAGR of 4.1% over the past decade. Given this company’s cash flow growth rate, I expect this dividend to continue to increase at this clip for the foreseeable future.
Telus
Another top Canadian telecom giant, Telus (TSX:T)(NYSE:TU) provides an array of information technology and telecommunications services and products in Canada.
Telus operates through both Wireline and Wireless segments. The company’s services and products are diverse, including security, internet, cable, agriculture, home automation, cloud-based products, and healthcare. This company’s earnings, dividend payouts, and revenues have consistently increased over the past 10 years, thereby showing its decent profitability and growth.
Telus posted good third-quarter 2021 results, and its fourth-quarter figures should be solid as well. Going forward, the expected bounce back in business and holiday travel in this year’s second half can drive up attractive roaming fees for the mobile segment.
Also, the company is completing its copper-to-fibre conversions and seeing an expansion in its 5G network. I think heavy capital outlays should peak this year or in 2023. This implies a greater amount of cash flow must be available for dividends in the coming years.
Both BCE and Telus remain excellent 5G stocks for investors to consider right now. Both would be fantastic additions to a long-term investor’s portfolio.
