Towers, chips, and connectivity; these two stocks are the perfect long-term holding for investors who want to ride the 5G network wave
5G is the 5th generation mobile network. Many might think it is just another, speedier version of 4G which will allow us to upload our pretty landscape photos to Instagram faster, but 5G is predicted to have some real benefits for the way our world currently works. Broadband and mobile services will indeed be faster, but 5G will allow for enhanced security on these networks as well as the flexibility to expand into mission-critical communications.
Indeed, the advent of 5G has given many companies the boost needed for further development of artificial intelligence (AI), expanding the capacities of data servers, and enhancing the connectivity of the Internet of Things. With 5G predicted to bring about further cultural change beyond what 4G achieved, we have two top 5G stocks to buy and hold for the long-term.
Broadcom (NASDAQ: AVGO) is a top player in the 5G market at the moment, as a semiconductor company, it is on the front line of producing hardware that will facilitate 5G connections. This gives Broadcom an edge as it will always have a customer pool as evidenced throughout 2020. Despite a slump last year in the automotive and smartphone industries, Broadcom managed to increase its revenue by 2.7% year-over-year (YoY) for the first half of its fiscal 2020, whilst its most recent earnings saw an 18% revenue increase YoY to $6.47 billion.
Broadcom is also pushing in the direction of connected cars. Indeed, 5G plus automotive and connected car development seem to go hand in hand, with Broadcom acting as an essential arbitrator to link the two. It has recently released two device families that have been produced with both high-speed data transmission as well as data security in mind, addressing each as a priority for the development of autonomous driving. The car market is a fixture that will be around for decades to come, evolving with the times; therefore, by encouraging 5G-based development in this area Broadcom is well-positioned to benefit from this industry as well.
Broadcom can also give you more bang for your buck as it pays out a quarterly dividend which at 3.3% is high for any dividend stock let alone a stock that is in the tech sector. This is a company that is heavily involved with 5G, an important technological advance for this day and age, as well as giving investors a tangible reason to buy and hold this stock forever.
When investing in 5G stocks, it isn’t just the tech stocks that should take the limelight, there are plenty of opportunities in other areas, such as the previously mentioned car industry. However, American Tower (NYSE: AMT) is a little bigger than that as it is a real estate stock that operates cell phone towers around the world.
American Tower is a real estate investment trust (REIT), a REIT is a company that owns and runs a portfolio of income-generating real estate. By their very nature, these companies are structured to be safe investments, if they make money, investors in the company make money. With president-elect Biden’s promise of expanding broadband across the country and as 5G networks begin to mature, providing greater coverage, American Tower is perfectly positioned to benefit from this throughout 2021.
American Tower was also named as a top socially responsible dividend stock for 2020. Sitting pretty in third place, the company has had both its social and environmental impact thoroughly analyzed, so perhaps this would be a top stock for millennial investors as well. The company is also a dividend stock, with a current yield of 2.03%. As more and more building contracts come in for the 5G expansion, American Tower will grow and so too will a return on any investment in this company.
This is a solid company to invest in without the added bonus of being part of the current 5G revolution, it will continue to give back to investors whilst also being socially and environmentally responsible. This is a stock that you can buy guilt-free and hold for the foreseeable future.
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MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in companies mentioned above.