5 stocks to buy amid continued 5G boom

The ability to transmit and process large amounts of data faster is the need of the hour and Canadian communication firms are building infrastructure to boost the fifth generation (5G) network. It is expected that the 5G network shall drive and deliver long-term values for customers and shareholders.

The outbreak of pandemic was seen as a blessing in disguise for the telecom sector. The need to contain the virus that led to global lockdowns, pushed people to connect virtually with their loved ones. This served as an opportunity for the telecom giants to upgrade the existing infrastructure.

On that note, let us look at five dividend-paying to explore in the long run.

  1. Rogers Communications Inc. (TSX: RCI.A)

The telecom company has a market cap of C$ 31.91 billion with 111.15 million outstanding shares. The stock price gained by 15 per cent in the last nine months, and on July 29 2021, it closed at C$ 64.40.

The total revenue reached C$ 3,582 million in the second quarter of fiscal 2021 increased from C$3.1 billion in the second quarter of FY 2020, up by 14 per cent year-over-year (YoY), as per the financial statement.

The adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) reached C$1,374 million, while the net income posted was C$ 302 million in Q2 FY 2021.

Rogers Communication has been recognized as one of the most consistent wireless broadband service providers with the fastest internet in several places in Canada. The company was awarded as Canada’s most reliable 4G and 5G network by umlaut, a mobile network testing and benchmarking firm.

The company is scheduled to pay its next set of quarterly dividends of C$ 0.50 apiece on October 1, 2021. It offers dividend yield of 3.10 per cent.

The telecom company holds an earning per share (EPS) of 3.16 and return on equity (ROE) being 16.48 per cent.

  1. Verizon Communication (NYSE: VZ:US)

The US$ 231.76 billion telecom company offers data, video, and voice solutions to its users. The stock is down nearly 5 per cent year-to-date (YTD). However, the total revenue was US$ 33.8 billion in Q2 FY2021, up 10.9 per cent year-over-year (YoY). The net income also grew, standing at US$ 5.8 billion in comparison to US$ 4.7 billion in Q2 FY2020.

The increased figures in second-quarter of 2021 was due to result of increased adoption of 5G phone, growth in wireless service, and the reliability of the network.

The management expects that as retail stores have opened to a pre-pandemic level, this will drive the momentum for the company.

The investors expect to receive the next set of quarterly dividends of US$ 0.627 apiece scheduled to be paid on August 02, 2021. The dividends have been historically yielding 4.48 per cent, and the 5-year average dividend growth rate is 1.97

The telecom company is valued at a price-to-earnings (P/E) ratio of 11.60, EPS of 4.83, and ROE stood at 29.31 per cent.

  1. BCE Inc (TSX: BCE)

BCE is one of the top communication stocks trading on the Toronto Stock Exchange. This telecom giant has a market cap of C$ 55.48 billion and 904.61 million outstanding shares.

The stock closed at C$ 61.76 on July 29, 2021 while it reached its 52-week high of C$ 62.70 on July 14, 2021. The stock is up 13 per cent YTD.

The company registered operating revenue of C$ 5,706 million in the first quarter 2021, up by 1.2 per cent YoY. The net earnings stood at C$ 687 million, down 6.3 per cent YoY.

The wireless division posted nearly 18 per cent YoY increase in gross addition of new postpaid connections.

The company is in the process of scaling up the rural and 5G network across Canada. It aims to achieve international environment certification by 2025.

BCE Inc paid quarterly dividends of C$ 0.875 apiece on July 15, 2021, to its investors, which yielded 5.66 per cent.

The equity investors had earned an ROE of 13.62 per cent. The company stands with an EPS of 2.72 and debt-to-equity (D/E) ratio of 1.60

  1. Telus Corp (TSX: T)

Telus stock is ranked as one of the most traded stocks, volume-wise by the TMX group. This company provides its wireless services to sectors like healthcare, agriculture, and international business.

On July 29, 2021, at day’s close, a volume of 1.76 million shares exchanged hands on the exchange. The stock closed at C$ 27.49 apiece on this day and is soared 20 per cent up in the last nine months, whereas it only peaked by 18 per cent in the past year.

The revenue grew by 10.3 per cent YoY to reach C$ 4.1 billion in Q2 FY2021. This resulted from acquisitions of new clients, good growth in the Media, Fintech, and e-Commerce industries. It posted a net income of C$ 344 million in the quarter.

As per the management’s commentary, cyber-attacks can pose a potential threat to the business.

It has a strong history of paying dividends to its shareholder, with the last quarterly dividend of C$ 0.31 apiece were issued on August 01, 2021.

  1. Shaw Communications Inc. (TSX: SJR.B)

Shaw Communications Inc (SJR.B) is a Canadian cable company providing internet, landline and telephone services.  The company is merging with Rogers in a C$26 billion deal.

The quarterly report posted revenue of C$ 1,375 million in Q3 FY2021, up 4.8 per cent YoY. The Adjusted EBITDA was C$ 642 million 46.7 per cent of the adjusted EBITDA margin was highlighted.

The pandemic outbreak had a positive impact increasing the usage of wireline networks at peak hours and increase in demand for voice services.

On August 30, 2021, the company is expected to roll out its next set of monthly dividends of C$ 0.099 apiece.  

The latest updated EPS stands at 1.79, P/E ratio of 20.30 and ROE of 14.81 per cent.



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