Are you still investing in outdated sectors? This is your clue to upgrade.
Don’t sleep on future advancements. A lot is changing in the world every day. Back during the days when people used 3G networks, many companies and investors looked at the emerging 4G technology in disbelief, underestimating the disruption that it was capable of causing. The best example of “you snooze, you lose” is Nokia, once the unrivaled tsar of the cell phone industry, quickly went from endangered to extinct. In the advent of 4G, Nokia didn’t even have 3G-enabled products, and this refusal to upgrade with changing dynamics led to the ultimate failure of the mogul.
There is another prescient disruption that is already taking the telecom industry by storm. Results have started to show in the first world countries. 5G networks are already deployed in plenty of developed countries and will soon be the new normal of the developing world.
Companies have begun to expand the 5G ecosystem, foreseeing the impending revolution in the gaming, software manufacturing, smartphones, data, and application industries and not just telecom.
With the likes of Nokia and Samsung launching 5G smartphones in the market and the producers of the chips that enable this technology like Huawei, Skyworks, and Qualcomm, it’s time for the investors to tread on the path of investing in its 5G stocks.
Having said that, we have compiled the list of the 5 best 5G stocks to buy in 2021. Every stock on this list is evaluated based on five major factors- Industry, Price-to-Earning Ratio (P/E), volatility of the stock, dividends, plough back, and past performance.
5 Best 5G Stocks To Buy In 2021
1. Skyworks Solution (NASDAQ:SWKS)
Skyworks Solution is on the top of our list of the 5G stocks that you shouldn’t miss out on at any cost. This American semiconductor manufacturer is already emerging as the leading figure on the 5G map and IoT. The valuation of the corporation at the end of Aug 28, 2021, stands at $30.29 billion with a 30.26% of net profit margin.
Experts believe that Skyworks Solution is expected to grow at 16.88% per annum for the next 5 years after the company earned $1.116 billion in revenues for the third fiscal quarter of 2021. This number reflects a whopping 52% growth year over year.
The P/E Ratio of the company is evaluated at 21.62. If you don’t know what exactly P/E Ratio reflects, the simplest way of understanding it here is that SWKS will keep trading at 21.62 times the earnings.
About dividends, the company rolls out $2.00 per share of the annual dividend to its shareholders, and the due date for 2021 is Sept 7. Another reason why SWKS is a good buy is that it has consistently increased its dividend over the last 7 years, with an average per year increase of 16.14%.
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2. Corning Inc. (NASDAQ: GLW)
Beyond semiconductor technology, a fiber-optic cable network is also imperative for the existence of 5G technology. Data needs a vast and dense network of internet to travel, and this part of the revolution is being overlooked by Corning Inc., a renowned glass and ceramics manufacturer. Corning Inc. is the major supplier of the back-end cable network of the 5G technology, which makes this stock extremely promising.
In the second quarter of 2021, the company registered $3.5 billion in core sales. The number represents a 35% increase year over year and 17% increase from Q2 2019. The free cash flow too registered a growth of 56% year over year, standing at $471 million.
It P/E ratio of the company stood at 38.41.
The company has been a significant participant in the development of the 5G ecosystem for years. However, substantial deals were made in 2020. GLW collaborated with Qualcomm to build a 5G mmWave network system in Q1 of 2020. It further came onboard with EnerSys in Q3 2020 for 5G deployment fiber and wireless ecosystem. In Q4 2020, the company cracked a deal with Apple to manufacture and scale Ceramic Shield. This is the world’s first transparent glass-ceramic, featured on iPhone 12.
GLW has exhibited a growth of 4.90% per annum for the last 5 years, and the trend is expected to continue at 23.90% per annum for the upcoming 5 years.
At $0.96 per share, the dividend is not as high as the other stocks on this list. However, it has increased its dividend rollout by around 12.38% over the years and boasts 41.94% dividend yield growth over the last three years.
3. Broadcom Inc. (NASDAQ: AVGO)
This $203 billion American corporation is one of the leading semiconductor designers, developers, and manufacturers, headquartered in California. AVGO has been enjoying a swift upward graph for more than a year now with a P/E Ratio of 46.1.
AVGO’s profit margin is slightly lower than that of the 5G stock SWKS at 22.59%. Nevertheless, this semiconductor manufacturer boasts of an impressive cash flow with $12.8 billion in operating.
According to the company’s official statement, revenues for the second quarter of 2021 stood at $6,610 million, which is a 15% growth year over year. Experts believe that AVGO will grow at the rate of 8.60% per annum in the next five years, after 30.56% of growth in the past 5 years per annum.
There are as many as 59 hedge fund holders for Broadcom Inc.
If you are an investor who goes by dividends that the stock has to offer, then AVGO would be a happy pick for you. The company rolls out an annual dividend of $14.40 per share consecutively grown in the last 10 years. The average per year increase in dividend of AVGO is 40.53%. The total dividend rollout of the company amounts to 78.05% of the total earnings.
4. Arista Network (NASDAQ: ANET)
Next on the must-buy list, 5G stocks are Arista Networks, a cognitive cloud networking solution provider for data centers and internet companies. Another important pillar of the 5G revolution is the technology to equip vast data centers as the new technology will bring a gigantic quantity of data into circulation. ANET is a leading equipment provider- both open-source hardware and software-defined tools for cybersecurity and management- for the data centers.
The company is worth $28 billion in valuation with a profit margin of 27.48% and 30.51% in operating margin. With a promising P/E Ratio of 40.70 as of Aug 28, 2021, Revenue per Share for the last 12 months stood 32.40.
The revenues for Q2 2021 for the company stood at $707.3 million, which is a 6% increase from Q1 2021. Arista Network shipped more than 50 million cloud network ports around the world cumulatively in Q2.
5. Qualcomm (NASDAQ: QCOM)
Qualcomm is the American semiconductor manufacturer headquartered in California and a highly trusted name in the wireless technology sector, making it one of the most promising 5G stocks to buy in 2021. In addition, QCOM is one name that has profited from the telecom revolution since the early 2000s, calcifying its legacy as the buffer for telecom and IoT advancement.
The Q3 2021 ending June 27, registered $8.1 billion worth GAAP revenue while $8 billion non-GAAP revenue, adding to its $163 billion worth market valuation. It has had a negative growth rate in the past 5 years; however, to compensate, QCOM is expected to grow at 27.29% per annum for the upcoming 5 years. Revenues of the company for the current quarter are projected to grow by a whopping 94.20%, thanks to the 5G fever.
The annual dividend rollout stands at $2.72 per share, and the dividend yield amounts to 1.93%. 77.84% of the company’s earning rolls out for dividends. Dividend growth for the last three years of QCOM stands at 14.73%.