4 Top 5G Stocks that Pay Dividends

The market for 5G services is set to explode in the coming years. 5G stocks like Qualcomm (QCOM), American Tower (AMT), Crown Castle International (CCI), and Analog Devices (ADI) are likely to see high profits and continue distributing steady dividends.

The global 5G market is estimated to grow at a CAGR of 43.9% between 2021 and 2027. As a result, companies that are working on developing 5G capabilities are poised to see high gains over the next few years.

The market for 5G services does not just include network operators but also several peripheral companies like wireless infrastructure providers and wireless chip developers. These companies are focusing on being market leaders in the coming 5G space and are innovating quickly to beat the competition.

Companies like Qualcomm, Inc. (QCOM), American Tower Corporation (AMT), Crown Castle International Corporation (CCI), and Analog Devices, Inc. (ADI) are making strong moves towards capitalizing on the 5G boom. These companies are laying the necessary groundwork that will make connecting America through 5G possible. This should help these companies witness solid appreciation in their stock prices and pay steady dividends.

Qualcomm, Inc. (QCOM)

QCOM develops and markets digital communications products and provides related services. The company has operations in the United States, South Korea, Taiwan, and China. QCOM’s stock has gained 69% so far this year.

QCOM has been working towards ramping up the commercialization of 5G capabilities worldwide. The company has announced its collaboration with DISH Network Corporation to roll out the first cloud-native, Open-RAN 5G network. This move will help to bring flexible and scalable 5G capabilities to North American markets. QCOM has also announced its plans to invest in 4 companies (Celona, Cellwize, Azion, and Pensando) that are working towards cutting-edge 5G solutions.

The company has distributed a $0.65 dividend per share for the last three quarters, which is an increase of 4.8% from the earlier dividend amount. The company’s dividend payout has a five-year CAGR of 9.02%. The expected annual dividend yield is 1.74% while the four-year average dividend yield is 3.6%.

QCOM is expected to witness revenue growth of 62.7% for the current quarter and 38.5% in 2021. The company’s EPS is estimated to grow 67.5% in 2021 and at a rate of 24.2% per annum over the next five years.

How does QCOM stack up for the POWR Ratings?

A for Trade Grade

A for Buy & Hold Grade

B for Peer Grade

A for Industry Rank

A for Overall POWR Rating

The stock is also ranked #3 out of 86 stocks in the Semiconductor & Wireless Chip industry.

American Tower Corporation (AMT)

AMT is a real estate investment trust that has operations around the globe. The company specializes in leasing space on communications sites to data providers, wireless service providers, broadcast companies, government agencies, and municipalities. AMT’s stock has gained 4% so far this year.

AMT is poised to gain from the growing demand for communication sites across the globe as company’s start deploying 5G networks. The company has recently announced its agreement to acquire In-site Wireless Group that owns and manages 3000 communication sites in the United States and Canada. The company has also entered into a 15-year agreement to allow T-Mobile to use its sites for the deployment of its 5G services.

The company has distributed $1.14 dividend per share for the last quarter, which is an increase of 3.6% from the earlier dividend amount. The company’s dividend payout has a five-year CAGR of 21.98%. The expected annual dividend yield is 1.91% while the four-year average dividend yield is 1.83%.

AMT is expected to witness revenue growth of 6.9% for the current quarter and 7.3% in 2021. The company’s EPS is estimated to grow 30% in 2021 and at a rate of 16.1% per annum over the next five years.

In our POWR Ratings system, AMT has a grade of “B” for Buy & Hold Grade. In the 51-stock REITs – Diversified industry, it is ranked #2.

Crown Castle International Corporation (CCI)

CCI owns, manages, and leases wireless infrastructure in the United States and Australia. The company’s network includes more than 40,000 cell towers. CCI’s stock has gained 16.4% so far this year.

CCI is another REIT whose infrastructure will prove crucial to the deployment of 5G across the United States. CCI has signed a long-term agreement with DISH to provide the latter communications space on up to 20,000 communication towers. CCI will be providing access to its 80,000-mile nationwide network to data center provider DataBridge Sites.

The company has distributed a $1.33 dividend per share for the last quarter, which is an increase of 10.8% from the earlier dividend amount. The company’s dividend payout has a three-year CAGR of 8.27%. The expected annual dividend yield is 3.22%, while the four-year average dividend yield is 3.64%.

CCI is expected to witness revenue growth of 5.3% for the current quarter and 5.6% in 2021. The company’s EPS is estimated to grow 29.3% in 2021 and at a rate of 17.4% per annum over the next five years.

It’s no surprise that CCI is rated a “Buy” in our POWR Ratings system, with a grade of “A” in Trade Grade and a “B” in Buy & Hold Grade and Peer Grade. In the 44-stock Real Estate Services industry, it is ranked #7.

Analog Devices, Inc. (ADI)

ADI focuses on the design and marketing of integrated circuits used for the processing of analog, digital, and mixed signals. Their integrated circuits are used in the automotive, consumer, industrial and communications spaces globally. ADI’s stock has gained 16.1% so far this year.

The company is collaborating with NEC Corporation to develop 5G Network Massive MIMO Antenna Radio Units for use by Rakuten Mobile. Further, ADI is collaborating with Microsoft (MSFT) to develop and market 3D imaging solutions and products.

The company has distributed $0.62 dividend per share for the last three quarters, which is an increase of 14.8% from the earlier dividend amount. The company’s dividend payout has a five-year CAGR of 7.85%. The expected annual dividend yield is 1.8% while the four-year average dividend yield is 2.06%.

ADI is expected to witness revenue growth of 8.6% for the current quarter and 8.3% in 2021. The company’s EPS is estimated to grow 15.9% in 2021 and at a rate of 8.4% per annum over the next five years.

ADI’s strong fundamentals are reflected in its POWR Ratings. It has a “Strong Buy” rating with an “A” in Trade Grade, Buy & Hold Grade, Peer Grade, and Industry Rank. In the 86-stock Semiconductor & Wireless Chip industry, it is ranked #8.

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QCOM shares were trading at $147.98 per share on Tuesday morning, down $1.09 (-0.73%). Year-to-date, QCOM has gained 71.28%, versus a 13.26% rise in the benchmark S&P 500 index during the same period.



About the Author: Aaryaman Aashind

Aaryaman is an accomplished journalist that’s passionate about providing in-depth insights about investing and personal finance. Recently he has been focused on the stock market and he specializes in evaluating high-growth stocks.

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