1 Top TSX 5G Play for Long-Term Income Investors to Buy Right Now

·3 min read
5G chip

Recently, telecom stocks have come into focus for many investors. Indeed, this could be due to a number of factors. However, the fact that these players continue to be top TSX 5G plays is one common denominator among investors right now.

The 5G revolution is one that is just getting started. Accordingly, investors bullish on the growth this catalyst provides are looking at telecom stocks as a way to play this race. Within the Canadian telecom space, BCE (TSX:BCE)(NYSE:BCE) continues to be a top pick for 5G investors today.

Let’s take a look at why this is the case.

Increased infrastructure makes BCE a top TSX 5G play

The incredible 5G rollout we’re seeing is pushing a tonne of capital into infrastructure spending for 5G plays. To lower latency and improve internet connectivity, such investments are necessary. And the larger the telecom player, the greater the spending power, and the greater the long-term market share opportunity for investors.

In this regard, BCE (TSX:BCE)(NYSE:BCE), appears to be well-positioned to reap the benefits of this catalyst. Company CEO Marko Bibic recently revealed that the company will be spending an additional $500 million rolling out high-speed internet and 5G wireless services.

Thus, the company’s initial projections of spending between $1 billion and $1.2 billion have been increased to the $1.5 billion to $1.7 billion range. These expenditures are on top of the company’s yearly capital spending budget of $4 billion.

A recent favourable ruling from Canadian telecom regulators spurred this announcement. BCE and its peers will be able to sell network access to smaller competitors at better rates. This is bullish for shareholders, but also for telecom players’ cash flows over time. Indeed, BCE’s intention to reinvest these cash flows in its infrastructure is bullish for long-term investors.

BCE’s earnings and fundamentals are quite enticing

From a financial standpoint, BCE appears to be in a solid position. Indeed, the company appears to be firing on all cylinders. During the company’s most recent earnings report, BCE noted revenues of approximately $5.7 billion, surpassing analysts’ expectations of $5.6 billion.

While BCE’s overall growth rate remains slower than that of other sectors, this is a highly defensive business. Investors need to compare BCE to its telecom peers to get a better idea of how this stock is doing. And in doing so, investors will see the value BCE provides.

The company’s higher-than-average dividend yield and best-in-class operating metrics make this stock an intriguing long-term hold for investors. Those looking at the top- and bottom-line metrics will like what they see with BCE today. Accordingly, this stock remains one of my top 5G picks today.

The post 1 Top TSX 5G Play for Long-Term Income Investors to Buy Right Now appeared first on The Motley Fool Canada.

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Fool contributor Chris MacDonald has no position in any stocks mentioned in this article.


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