Best 5G Stocks in 2019?

Best 5G Stocks in 2019?

what's up guys welcome back to the channel got another highly requested video for you today a lot of you have been asking me what are some 5g stocks that I currently track here in 2019 so I decided to come up with three stocks that I think have a lot of exposure to 5g as it rolls out in the next few years and at the end of the video I'm also gonna give you guys a few extra stocks as honorable mentions as well but as always please do your own research and make your own decisions these are just some stocks that I think can potentially benefit from 5g over the long term doesn't mean you should go out and buy them if you find them interesting then you can research them further now 5g is exciting many investors because it will ultimately mean much faster data speeds than what we're currently used to with 4G and some estimates put it at being around a hundred times faster than 4G in certain scenarios and this would obviously benefit some very high-growth kind of trendy buzzword kind of markets like autonomous driving machine learning deep learning artificial intelligence the Internet of Things and of course smartphones in general and that's a big deal because some estimates value the economic impact of 5g in the trillions of dollars now we can obviously pick a variety of different stocks and companies from all of these different markets but in today's video we'll be looking at some more kind of direct pure-play 5g stocks so with that said I hope you guys enjoy this video and let's go ahead and start with stock number three all right with stock number three we're gonna go with a very obvious and very popular pick and that is Apple ticker symbol AAPL now smartphone sales across the board are very weak right now and Apple has definitely been feeling the impact of that as their iPhones have become more expensive over time and people are less willing to upgrade their handsets but 5g has the potential to change all of that because if they implement those 5g chips into their iPhones and they allow customers to gain access to very fast 5g speeds then that could convince a lot of consumers to upgrade their smartphones and kind of lead to the next very high demand cycle for smartphones now taking a look at the stock we can see that they are up a lot in the past five years by almost a hundred percent and despite having a nice rally here in 2019 climbing by over 13% they took a decent hit last month dropping by over 12% much of the reason why has to do with the trade war between the US and China bringing down the overall stock market but Apple got some of the worst of it because they do a ton of business over in China in fact it's their second largest market by country and third largest by region only behind the US and Europe at about 18% of all their sales so about one-fifth of all their sales come from China not a good statistic considering that the Chinese economy continues to weaken and the most recent ban on Huawei could lead to Chinese nationalists refusing to buy iPhones in support of their home countries phone maker there's not a lot of evidence to support this yet but investors are clearly scared of the idea and we've already seen Apple blames some of their weaker sales on China as they were only ranked fifth in the country by market share and still managed to lose even more in the first quarter dropping from nine point one percent to just seven percent sequentially still it might be short-sighted to think that Apple can't push through all of this negativity don't get me wrong iPhone sales still make up the vast majority of the revenue which by the way dropped by over 17 percent last quarter year-over-year but their total revenue only dropped by around 5 percent meaning that their other products are already picking up the slack notably their wearables home and accessories segment which jumps by 30 percent year-over-year and more importantly their services segments reach record sales becoming the second biggest segments of the company and jumping by over 16 percent keep in mind that they also have over a hundred and twenty billion dollars worth of current assets much of which is considered cash depending on how you classify it and they're already putting the money to good use not only do they pay out a growing dividend that only yields 1.8% but has a payout ratio of just 25% with a double-digit five-year growth rate but they also continue to increase their share buyback program by tens of billions of every single year with last year's authorization growing by a hundred billion dollars and they're also investing heavily on the streaming TV market as well as a very secretive project in autonomous driving systems both of which could be big plays on some very high-growth markets all the meanwhile Apple continues to rake in enormous profits with last year alone seen about sixty billion dollars of net income so you essentially have a massively profitable company that is going through some short-term weakness because of smartphone sales but once 5g rolls around that could change everything now I believe they were planning to release their 5g phone by next year but that was one there were still kind of in agreements with Intel to provide them with their 5g modem and then that kind of fell through and Intel isn't even working on 5g modems anymore but Apple and then so that was gonna be pushed out even further for their iPhone but they did recently settle a deal with Qualcomm and now Qualcomm will be providing them with 5g modems I believe for the next like six years so because of that they will now apparently be releasing the next 5g iPhone next year so that could be sometime in 2020 so in the short term I think there's still some pain for Apple to go through they have too much exposure to China and the whole trade war is just a mess so the stock could possibly sink lower but over the long-term and especially looking out into the next decade and even further than that Apple is a company that is very hard for me to bet against very good balance sheet investing heavily in future growth prospects and I think 5g would just be another one of those another catalysts for strong performance over the long term and that brings us to stock number two which I was going to go with Qualcomm because it's a stock that I'm very interested in it's one that I've always tracked for a long time I've never owned it don't own Apple either but I decided to not go with Qualcomm in today's video because a recent court ruling left a lot of uncertainty surrounding the company and I just can't wrap my head around how it's all gonna play out so there's just too much uncertainty so I decided to go with a different semiconductor 5g related stock instead and this one makes all sorts of chips and components not just for smartphones but also for other more it's like data center autonomous driving and several others as well and that company is Broadcom ticker symbol AVG oh and some of the things that I like about Broadcom is that they they're a huge play on 5g because of the markets that I just mentioned heavily involved in all that and the 5g kind of infrastructure and components and chips and pieces that go along with it but they also have some decent growth they have a decent valuation and they still pay out a very nice dividend as well now in the past four years Broadcom has literally tripled their sales growing from just 6.8 billion dollars of revenue in 2015 to over 20 billion dollars last year but this growth hasn't been limited to just sales as profits have also been soaring with free cash flow jumping from just 1.8 billion dollars in 2015 so as much as eight point five billion dollars last year that's an increase of around three hundred and seventy percent that is a lot and they've been using those profits to reward shareholders as they pay a dividend that still yields over three point three percent with a payout ratio of less than 50 percent and they've been growing that dividend every year for almost the past decade and according to seeking alpha their five-year growth rate is over fifty five percent which is pretty insane and you'd think that with all of that growth the stock would be trading at a much higher valuation but despite climbing by close to three hundred percent in the past five years the company has been recently struggling because of the weak smartphone market and as a result the stock is down to around the midpoint of their 52 week range dropping by over 20 percent last month alone and now has a valuation of just ten times next year's earnings with a p/e G ratio of less than one their price to cash flow ratio is also at some of the lowest levels that we've seen in the past five years and again this is despite the fact that they have some pretty decent growth prospects in the future having said that this isn't a company without its problems there's semiconductor segments that includes Wireless sales from smartphones makes up the majority of the revenue and because we're going through a week period in smartphone sales that segment drops by as much as 12% year year in their last quarter mostly because Apple is one of their biggest customers however the company has found success in diversifying their portfolio as that drop in sales was more than offset by their software segments growing by a massive 328 percent which led to total revenues actually increasing still by about 9 percent here over a year that's pretty impressive and that weakness in their semiconductor business has a potential to turn around one smartphone sales pick back up which 5g could very well help in that regard in fact their CEO even mentioned that they expect their semiconductor segment to return to growth in the second half of the year and while there is still weak demand in China he noted that this was already factored into their guidance of twenty four point five billion dollars in revenue for the full year which is yet another nice increase from the previous years kind of continuing their growth trajectory or history and trajectory not to mention that 5g could also fuel growth in the IOT or Internet of Things market the data center market and the autonomous driving markets all of which Broadcom is heavily involved in so just like apple I think Broadcom is another company that is kind of struggling here in the short term because of weaker smartphone sales and that could potentially turn around in the next couple years once 5g really starts rolling now having said that I don't own Broadcom either so neither Apple or Broadcom but there are two stocks that I track very closely and I will definitely be keeping my eye on both as 5g becomes more mainstream in the coming years but speaking of my own personal investments I may not be invested in those last two but I am invested in this next 5g stock and so for this next one we're gonna go on to stock number one and that is of course as you guys know AT&T ticker symbol T and the reason why I like AT&T well obviously it's a huge play on the 5g market they are a network provider themselves so they're heavily heavily involved in 5g but also I like the fact that they are trying to diversify into other areas of their business and they also have a pretty decent valuation at this time with a very large dividend now taking a look at the stock they've had some pretty bad performance recently still down even in the past five years by over 10% and that's because they dropped by almost 30% from their highs back in 2016 the drop is mostly due to stagnation and lower growth as their sales actually dropped in 2017 by about two percent although to be fair they still brought in over a hundred and sixty billion dollars in a single year another concern however is their weak balance sheet and massive debt load as they only have fifty 1 billion dollars in current assets but sixty four billion dollars in current liabilities and an enormous gigantic 166 billion dollars of long-term debt that is very scary I do cut them a tiny bit of slack here however because they generate a ton of free cash flow that has grown to over twenty two billion dollars last year but their debt remains a very large concern nonetheless in any case much of that has been baked into the stock as it only trades for less than nine times next year's earnings and it also leaves them with a very high dividend yield of over over of about six point five percent that has grown every single year for the past thirty five straight years that is a massive dividend growth history hopefully they don't have to cut it because of the debt but anyway full disclosure I only bought this stock at significantly lower prices so my dividend yield is well over seven percent at this point and again I'm really hoping that they don't ever cut it in any case one of the biggest issues has been losing TV subscribers because of the whole cord cutting movement losing over half a million paid TV subscribers last quarter alone however 18t seems to be making moves to return to higher growth in the future as the acquired Time Warner which includes Warner Brothers the DC Universe and of course HBO all of which they will be using to launch their own streaming service later this year to compete with the likes of Netflix and Disney they're also expecting their free cash flow to increase yet again this year this time to a record-breaking twenty six billion dollars which is very important if they want to continue paying that dividend and with the rollout of 5g happening later this year and into 2020 18c is well-positioned to attract a number of customers who we'll need their network and services in telecom autonomous driving the Internet of Things and several other markets making 18t a stock worth keeping a close eye on by the way their fiber network is critical to their 5g deployment and it recently broke past 12 million locations pushing them even closer to reaching their goal of deploying nationwide 5g by the first half of next year alright guys that does it for today's video oh wait I promise you guys I would give you some honorable mentions all right let's run through some honorable mentions we'll do this quickly so that the video doesn't drag on forever let's run through them all right the first one here Verizon it's a stock that trades at about 56 dollars a share and just like AT&T they are another network provider that has already rolled out five G in Chicago and Minneapolis and are on track to launch in 30 cities by the end of the year they also pay very nice dividend that yields over 4% with 12 years of growth but just like AT&T their balance sheet is a major concern as they only have thirty three billion dollars in current assets but over a hundred and forty billion dollars in total debt a couple other interesting 5g stocks that are involved heavily in providing equipment infrastructure and/or services to many 5g related companies are Ericsson and Nokia a major rival to to both of them is of course China's Huawei but pressure from the Trump administration through a band and encouraging allies to now use Huawei's equipments in their networks has led to some businesses already shifting over to rivals like Nokia and Ericsson to assist with their 5g rollouts in fact just a few days ago Japan's Softbank switched from Huawei to both Ericsson and Nokia for 5g equipment and services having previously used Huawei in preparation so they pretty much were using Huawei and then they just kind of cut it off and switched over to Ericsson nokia now Nokia also pays a very nice dividend that is always fluctuating because of currency rates as it's a foreign company out in Finland but it usually hovers around some pretty high rates consistently hitting well above 3% however recent performance for the company hasn't been very strong and has sent the stock dropping in the past five years by over 32 percent and they don't expect a fully start benefiting from 5g until the second half of the year while Erickson on the other hand has already seen great results from 5g as they increase sales year-over-year in their last quarter by 13% reported 7% adjusted and went from a lhasa net income to a substantial profit with their CEO noting that 5g was the biggest impact on their positive results and the stock has climbed by over 30% in the past year alone I kind of like Nokia a little bit more just because of the dividend but both seem like pretty good companies therefore 5g and finally just to wrap everything up I'll add that there are a couple of semiconductor companies that build chips and components for 5g smartphones and other devices and markets and two that are somewhat popular are skyworks solutions and Taiwan Semiconductor Apple is a huge customer to each of them but I happen to like Taiwan Semiconductor a little bit more just because they're also building the seven nanometer chips for AMD that has recently sent AMD stocks soaring skyward stock has been struggling recently as they dropped by almost 25 percent last month alone but things are expected to improve in the next couple of years when 5g iPhones start releasing while Taiwan Semiconductor stock was also hit pretty hard last month but only dropped by about half of the percentage points of Sky works either way both stocks pay out a decent dividend but TSM is a little higher by around 1% TSM bean Taiwan Semiconductor full disclosure I have been invested in Taiwan Semiconductor for quite some time alright we got through those quickly I hope you guys enjoyed the video thank you so much for watching make sure you hit the like button if you enjoyed it and you want to see more videos in the future and if I left out any 5g socks please leave them down below not only helps me also helps the community and we can all learn together about some different stocks thank you so much for watching I'll catch you guys in the next one take care bye bye

40 thoughts on “Best 5G Stocks in 2019?

  1. Are you guys invested in any of these? Any 5G stocks that I left out? Let me know! 🙂

    Stock #3 – 1:40
    Stock #2 – 6:05
    Stock #1 – 10:27
    Honorable Mentions – 13:34

  2. Qualcomm is only 1 of 3 companies that have proven they can make a stable usable 5G modem. Intel threw a ton of money and time in an attempt to make one however they really never got close. Apple had to crawl back to Qualcomm and pay an undisclosed settlement to get back in with them. All Apple phones from 2020 to the foreseeable future will have 5G modems. Samsung can build them.Huawei can build them. And Qualcomm can build them. Now that Huawei is blacklisted this is almost a Boeing and Airbus situation with a pretty big moat around these companies. I have no idea what will happen with that court ruling however big money interests need Qualcomm to succeed in a big way. I think it is prudent to own at least a little Qualcomm. I do and if it drops a bit more I will add.

  3. I have T (cost basis 30.xx), AAPL (cost basis 146.xx) and just picked up some SWKS when it dropped last week (cost basis 69.xx). Didn't catch the low on that one but still happy with the cost basis since I plan to hold for at least 3-5 years.

  4. Hey Ale, I have been following your channel for quite a few months now and thought I'd comment. I've been living and working in China for nearly 20 years and have seen a very noticeable decline in Apple stores in the high street here and Huawei stores everywhere. I really worry for Apple sales over here and many people here are flatly refusing to buy Apple in support of Huawei / China in general. I'm not going to be buying Apple for a while to watch how this unfolds. I can't see Apple doing well here for a few years minimum.

  5. I believe in you bro. I had read all about these stocks that's coming out with 5 G network. You're definitely telling the truth. You're the man. Thank you for being honest. That means a lot for US beginners.

  6. Great video as always Ale… So well done! Here's my quick take on your picks as well as ideas on a few others.

    AAPL – Love the pick at these reduced prices. I continue to believe Apple will have the best 5G phone when the time comes where that's important. Not worried about being first. Prefer being best! Stock buybacks funded by free cash flow alone should increase existing shareholder equity by 5% annually (unless the story changes in a big way). Full disclosure – Long time owner of AAPL shares with no plans on selling at this point.

    AVGO – This pick makes a ton of sense and should be a leader in the 5G chip space for years to come. I recently read an article saying Broadcom is the first to complete an end-to-end mobile networking switch portfolio consisting of 6 Broadcom products. Sounds like a nice win. I've never owned shares of AVGO and don't follow closely for whatever reason. Definitely my bad and time to change that.

    T – AT&T makes a lot of sense as well, especially for those looking for business diversification and dividends. With that said, I believe the company is over-diversified and that's part of the reason I can't get behind the company at this point. I think there are too many capital intensive business within AT&T that will be fighting for the billions required to keep each running efficiently.

    Your bonus ideas of VZ, NOK, ERIC, SWKS & TSM all are worthy 5G picks as well. I have SWKS on my 'Consider Buy' watch list, but the others aren't for me at this point.

    Others industry stalwarts that should play prominently in 5G include CSCO, INTC, MSFT and NVDA. Full disclosure – I own shares in CSCO, INTC and NVDA.

    Other names that I see benefiting from 5G, but not talked about as much include PANW, ROK and SPLK. All 3 are approaching prices where I will consider initiating positions.

    Cheers my friend…

  7. I really hope AAPL crashes HARD with the Tariff war still going on. Would loveeee another shot at AAPL at $145 lol

  8. I like Corning (GLW) for its fiber optics business. A lot of cell carriers will need to upgrade their backhauls for 5G, which will require a lot of fiber optics.

    Among carrier stocks, I like T-Mobile US (TMUS) the most, because it won't rely on high-frequencies for 5G rollout. Some scientists are concerned that the high frequencies that VZ and T want to use will cause jamming of their weather satellites used to generate long-term weather forecasts. So if there are issues at those frequencies, TMUS will be better leveraged.

  9. I don't like companies that do one thing. Too much risk on one product and I don't know the longevity of 5G vs future technology like 6G, 13G. That's why I like Apple and AT&T. They are definitely affected, but they are big enough to have other sources of revenue and still get the short term exposure to 5G if it's plays out.

  10. I’m long on Apple, AT&T and Verizon. Hopefully 5G will have some positive impact on these companies. I personally think of these three Apple will benefit most from this new technology. Thank you for bringing this topic up Ale.

  11. Ha! I think I was one of the people that requested 5G stocks. I have positions in Nokia and verizon. Great video and analysis!

  12. Great video Ale . The nokia dividends do not come to us in full though!
    There is a certain 15% held as a part of foreign tax witheld and also there is an ADR fees attached .
    So the juicy 4.5% yield becomes around 3% 🙁

  13. Def long on aapl, t, and vz myself. 2 big yields and 1 small yield with bigger div raises. And T is a div aristocrat.

  14. Some 5G stocks that Ive been following that are considered as real value stocks on Acquirers Multiple are: $MBT $VEON $TKC and they all pay 5% dividend and above. What's your take on them if any? Cheers

  15. I didn't realize that Verizon had nearly as much debt as AT&T… that's interesting. I wonder how much of that is solely due to the 5G wars to come, with both companies scrambling to build infrastructure?

    Also, I have small positions in Verizon, AT&T, and Taiwan Semiconductor.

  16. I'm long Nokia after their last report following a drop. I think they allready announced like 42 5G customers so I really hope they won't fuck it up.

  17. AT&T is a no brainer at these prices. Big dividend and will be in the center of 5G. Also it’s p/e is cheap do good value and if the market goes negative investors will run to AT&T just for that high dividend and no China conflict. Screaming buy

  18. I thought you were going to say Qualcomm lol but I really like the points you had on Broadcom. I’ll definitely do my due diligence on them, good video

  19. Great video! My favorite 5G stocks are Xilinx, Skyworks, and AT&T. Also, very nice to see a bull market after seeing such bearish returns!

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