With the rising demand for faster data speed and services, changing industry sentiments, and advancements in technology, the 5G industry is continuously rising. Also, supportive government initiatives and rapid adoption of the latest technologies will hike demand in the future, opening more avenues for the market.
Given the industry’s promising prospects, investors could consider buying quality 5g stocks QUALCOMM Incorporated (QCOM) and Verizon Communications Inc. (VZ) for the next tech revolution.
Amongst the current technological advancements worldwide, 5G technology has predominantly stirred a wave of innovations across multiple sectors. The technology is transforming various segments and changing the way they operate. Also, this technology revolution is set to expand continuously in scale in the forthcoming years.
Since its rollout in 2019, the 5G technology has been growing exponentially. As of now, over 62% of smartphones are built with 5G connectivity, and the number of networks is growing, with major Internet service providers offering 5G connectivity for homes and businesses.
Further, the Federal Communication Commission (FCC) established the 5G Fund for Rural America. It made up to $9 billion in Universal Service Fund support available for deploying advanced 5G mobile wireless services in Rural America. This reinstates the criticality of the 5G network in modern times.
With this, the global 5G services market size is expected to reach around $2.21 trillion by 2030, exhibiting growth at a noteworthy CAGR of 59.4%. The need for high-speed data connectivity for unified Internet of Things (IoT) applications, like smart home energy management, is propelling the market growth.
Given the industry’s robust outlook, investing in fundamentally strong 5g stocks QCOM and VZ could be wise.
Let’s discuss the fundamentals of these stocks in detail:
QUALCOMM Incorporated (QCOM)
QCOM is engaged in the development and commercialization of foundational technologies for the wireless industry worldwide. The company operates in three segments: Qualcomm CDMA Technologies; Qualcomm Technology Licensing; and Qualcomm Strategic Initiatives.
On October 16, QCOM announced a quarterly cash dividend of $0.85 per common share, to be paid on December 19, 2024, to stockholders of record at the close of business on December 5, 2024.
QCOM pays an annual dividend of $3.40, which translates to a yield of 2.02% at the current share price. Its four-year average dividend yield is 2.09%. Moreover, the company’s dividend payouts have increased at a CAGR of 7.1% over the past three years. QCOM has raised its dividends for 20 consecutive years.
On September 25. QCOM's subsidiary, Aramco, and Saudi Arabia's Research, Development, and Innovation Authority (RDIA) announced their plans to introduce Design in Saudi Arabia (DISA), an incubator program for Saudi Arabia that aims to support startups adopting AI, Internet of Things (IoT), and wireless technologies for industrial use cases.
During the third quarter that ended June 23, 2024, QCOM's revenues increased 11.2% year-over-year to $9.39 billion. Its non-GAAP operating income of $3.02 billion reflects a 19.7% increase from the previous year quarter. The company's non-GAAP net income and EPS came in at $2.65 billion and $2.33, up 25.8% and 24.6% year-over-year, respectively.
Analysts expect QCOM’s EPS for the fourth quarter (ended September 2024) to increase 27% year-over-year to $2.57. For the same quarter, the company’s revenue is expected to grow 14.6% year-over-year to $9.93 billion. Further, the company topped the consensus revenue and EPS estimates in all four trailing quarters, which is impressive.
Shares of QCOM have surged 2.7% over the past six months and 53.7% over the past year to close the last trading session at $168.10.
QCOM’s POWR Ratings reflect its robust outlook. The stock has an overall rating of B, equating to a Buy in our proprietary rating system. The POWR Ratings are calculated by considering 118 different factors, each weighted to an optimal degree.
The stock has an A grade for Quality. It is ranked #2 out of 91 stocks in the Semiconductor & Wireless Chip industry.
Click here to access additional QCOM ratings for Stability, Momentum, Value, Sentiment, and Growth.
Verizon Communications Inc. (VZ)
VZ offers communications, technology, information, and entertainment products and services to consumers, businesses, and governmental entities internationally. The company operates through Verizon Consumer Group (Consumer) and Verizon Business Group (Business) segments.
On October 23, Verizon Frontline launched two new deployable asset prototypes designed to support the mission-critical communications needs of first responders during public safety operations. The two new Verizon Frontline prototypes assets are capable of establishing their own off-grid network, allowing first responders to communicate with each other in challenging situations.
On October 22, VZ updated its broadband strategy with new fixed wireless subscriber goals, household targets, and broadband offerings, which accelerate its premium broadband and mobility services to millions more customers nationwide.
For the third quarter that ended on September 30, 2024, VZ reported total operating revenues of $33.33 billion, and its operating income was $5.93 billion. The company’s net income and EPS came in at $3.41 billion and $0.78 for the quarter, respectively.
Furthermore, the company’s cash and cash equivalents stood at $4.99 billion as of September 30, 2024, compared to $2.06 billion as of December 31, 2023.
Analysts expect VZ’s revenue for the fourth quarter (ending December 2024) to increase 0.9% year-over-year to $35.45 billion, while its EPS for the same period is expected to grow 3% year-over-year to $1.11. Also, it has topped the consensus EPS estimates in three of the trailing four quarters.
Shares of VZ have gained 6% over the past six months and 22% over the past year to close the last trading session at $41.86.
VZ’s sound fundamentals are reflected in its POWR Ratings. The stock has an overall rating of B, which translates to a Buy in our proprietary rating system.
The stock has a B grade for Stability. Within the Telecom - Domestic industry, VZ is ranked #3 of 19 stocks.
Click here to access other ratings of VZ for Momentum, Sentiment, Value, Quality, and Growth.
What To Do Next?
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QCOM shares were trading at $170.68 per share on Friday afternoon, up $2.58 (+1.53%). Year-to-date, QCOM has gained 19.71%, versus a 23.06% rise in the benchmark S&P 500 index during the same period.
About the Author: Rjkumari Saxena
Rajkumari started her career as a writer but gradually shifted her focus to financial journalism, leveraging her educational background in Commerce. Fascinated by the interplay of business and economic shifts in equities, she aspires to evolve as an analyst. With a knack for simplifying complex financial concepts, her mission is to empower investors with insights that lead to profitable decisions.
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