5 best 5G stocks to buy in August 2021


With 5G networks gradually being rolled out in several corners of the world, but with the technology still in its early stages of adoption, investors have the opportunity to buy shares of companies that are favorably positioned to benefit from this innovative technology at a low cost. when the market may not fully assess its potential.

To help you shortlist your potential candidates for building a strong portfolio of companies exposed to 5G, the following article takes a closer look at five names that display the type of financial strength, positive past performance, and bright outlook which could generate further upside once the technology is fully implemented.

# 1 – Advanced Micro-Devices (AMD)

Advanced Micro Devices (AMD) Price Chart – One Day Candles With Multiple Indicators – Source: TradingView

Advanced Micro Devices has just announced an exceptional second quarter 2021 where sales jumped 99% from a year ago while gross margins showed significant improvement from 43.9% last year to 47 , 5% at the end of the last three months.

Meanwhile, earnings per share hit $ 0.63 for a 250% year-over-year jump and they also jumped 9 cents higher than the previous quarter’s readings.

In May this year, the company announced that it would repurchase more than $ 4 billion of shares, of which only $ 256 million has been deployed, while forecasts point to further growth in the company’s profits, with a net profitability which should increase by 20%. on average over the next two years.

Being a conservatively funded company that only has $ 553 million in long term debt and over $ 3.8 billion in cash and cash equivalents while trading at a fairly conservative forward P / E multiple of 40 AMD is one of the more attractive 5G choices amid its strong financials. , growth prospects and positive past performance.

67% of all retail investor accounts lose money when trading CFDs with this provider.

# 2 – Verizon Communications (VZ)

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Verizon Communications (VZ) Price Chart – Weekly Candles with Multiple Indicators – Source: TradingView

Verizon is reportedly one of the first operators to roll out a 5G network in the United States, currently covering more than 2,700 cities while serving approximately 230 million customers.

Its profit margins have improved in recent times and the company just posted an excellent second quarter which included an upward revision to its EPS guidance for the year from a previous range of $ 5 to $ 5.15. to a new range of $ 5.25 to $ 5.35.

The stock currently offers a very attractive dividend yield of 4.5% which translates into a payout ratio of 50% based on the company’s expected earnings for the year. This dividend appears to be fairly well covered in view of its historical capacity to generate cash flow.

Currently trading at just 10 times its expected earnings for the year, the market clearly does not assess the positive impact that a full 5G implementation could have on Verizon’s financial performance, as higher speed speed could lead to increased volumes of data consumption amid the launch of innovative technologies that incorporate augmented reality (AR) and virtual reality (VR) functionality.

67% of all retail investor accounts lose money when trading CFDs with this provider.

# 3 – Crown Castle International Corp (CCI)

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Crown Castle International (CCI) Price Chart – One Day Candles with Multiple Indicators – Source: TradingView

Crown Castle is a specialty real estate investment trust (REIT) that owns more than 40,000 cell phone towers and thousands of miles of fiber optic in the United States and the company is fully preparing to meet demand from operators looking to expand their 5G coverage across the country.

This REIT is currently offering a dividend of 2.75% and distributions are expected to increase at a rate of 7% to 8% per annum, which is fairly consistent with the past growth of the company.

So far this year, shares of this 5G-exposed REIT have risen 23.6% on top of a 15.5% jump they reported last year. Along with the dividend, this past performance has been quite attractive as this REIT plans to invest billions in the deployment of small nodes that will serve as critical infrastructure to deploy 5G networks across states.

According to its plans, the company believes that shareholder value could be increased as a result of these deployments once the pace of 5G network deployment increases.

67% of all retail investor accounts lose money when trading CFDs with this provider.

# 4 – Marvell Technology (MRVL)

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Marvell Technology Price Chart (MRVL) – One Day Candles With Multiple Indicators – Source: TradingView

Marvell sells key components needed to power 5G devices and the company’s latest financial performance has made it stand out as a solid choice for those preparing for the widespread adoption of 5G around the world.

In the past year, sales rose 10% to $ 2.97 billion while gross margins stood at 51%. Although these margins have deteriorated lately, they remain very attractive as they have enabled the company to post net margins of around 25%.

Meanwhile, in the first quarter of 2021, the company’s revenue and profitability exceeded analysts’ estimates, while stocks are up 31% so far this year. Additionally, the company’s stock has appreciated more than 80% last year, with demand for its components at an all-time high due to a global chip shortage.

Going forward, analysts expect earnings per share to grow at an average annual rate of 35% – a percentage that makes the current P / E multiple of 40 seem rather conservative for a company in such an industry. promising.

In terms of its solvency, the company currently has long-term debt of $ 4.7 billion on assets of $ 21.3 billion including $ 17.8 billion in intangibles and $ 522 million in cash.

Due to its direct exposure to the growing demand for 5G components, Marvell is a top choice to consider even if investors need to keep an eye on the evolution of the company’s leverage as debt levels are. high enough for a company with such a high percentage of intangible assets on its balance sheet.

67% of all retail investor accounts lose money when trading CFDs with this provider.

# 5 – Defiance Next Generation Connectivity ETF (FIVG)

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Defiance Next Gen Connectivity ETF (FIVG) Price Chart – One Day Candles With Multiple Indicators – Source: TradingView

For those who prefer to take a more conservative approach when integrating 5G stocks into their portfolio, the Defiance Next Get Connectivity ETF offers diversified exposure to this promising segment of the tech industry as it currently invests in 91 different companies with the potential to benefit from the adoption of 5G globally.

As of this writing, AMD remains the largest holding in the fund, currently accounting for 6.7% of its assets, followed by Qualcomm (QCOM) and Analog Devices (ADI). The top 10 holdings of the fund currently represent 36% of total FIVG assets, while assets under management stand at $ 1.3 billion.

The fund charges an annual expense ratio of 0.3% and a dividend yield of 0.93%. So far this year, FIVG has achieved a 16% gain for investors on top of the 30% gain recorded in 2020.

67% of all retail investor accounts lose money when trading CFDs with this provider.

About Alejandro Arrieche PRO INVESTOR

Alejandro is an independent financial analyst with 7 years of industry experience. He writes technical content on economics, finance, investments and real estate and has also helped financial companies develop their digital marketing strategy. His favorite subjects are value investing, market and technical analysis. Other publications Alejandro has written for include The Modest Wallet and LearnBonds.

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