5G wireless networks are ready for prime time this year. According to forecasts, 5G wireless infrastructure spending will increase to about $4.2 billion in 2020, compared to $2.2 billion last year, as more countries adopt this new technology.
Additionally, this latest innovation in telecom represents a major shift in the industry. Major players and governments have pushed for integration of 5G. This technology enables other technologies to flourish. In other words, it is a force multiplier, one that comes around only once every several years. As such, the telecom market and all administrations will most likely adopt this new technology, and companies that take advantage will experience tremendous growth.
With that, below are two awesome 5G stocks to watch out for in 2020.
Resonant Inc. (NASDAQ: RESN)
Resonant Inc. is based in Goleta, California and is mainly involved in designing filters for radio frequency electronics used in smartphones. With an $80 million market cap, the company is not profitable yet, and as not free cash flow. However, as the company moves to serve 5G needs in an RF filter market that could grow to $28 billion in annual sales by 2025, it could be a near two-bagger.
The increased demand for “streaming video and increased bandwidth requirements” will push for more growth in this case, as 5G needs demand better tech to serve the same. Additionally, 5 different analysts that offered a 12-month price forecast for this stock have a median target of 4.50, with a high estimate of 7.00 and a low estimate of 3.50. This estimate represents a +63.64% increase from the previous price.
Moreover, the 5G stock lies in the middle of a wide rising trend in the short term and thus is expected to rise 15.17% in the next 12 weeks, and with 90% probability. Stockinvest.us states that Resonant Inc. is holding several positive signals, and should be considered a bold and accumulate candidate.
Nonetheless, investors should not yet forget 4G because it will continue to be a major player in this sector. The main reason is that 5G will not be everywhere, and even true speeds will not be experienced immediately, and investors should expect 4G to provide a backstop for 5G coverage holes.
Overall, Resonant Inc. has an opportunity to become a major player in this sector as it takes advantage of the revolution, to make RESN one of the best stocks to buy in 2020.
CCI – A 5G Tech Stock
With 5G rolling out soon, the sentiment within the wireless communications industry is that telecom stock is on the upside.
Tower, chip, and other equipment companies that make the infrastructure that will act as the backbone of this advanced high-speed network are set to have hectic days as they push for the adoption of the red-hot technology.
With this in mind, there isn’t a better time to snap some telecom stocks at relatively low prices and watch as they grow to make you rich.
In this piece, we are going to have a look at one hot tech stock everyone interested in the industry ought to own; the CCI stock.
Briefly, we will look at the history of the company behind the stock, and a few reasons why we believe this stock is on the way up.
A Brief History Of Crown Castle International Corp.
Crown Castle International is the largest provider of shared communications infrastructure in America with over 40,000 cell towers.
As of March last year, the company also had over 70,000 route miles of fiber that was supporting small cells and fiber solutions across every major market in the United States.
Crown Castle was founded in 1994 in Texas. With over 100 offices in the US, the company employs more than 5,000 workers.
It’s also an S&P 500 company that is listed on the NYSE under the CCI tinker with an enterprise value of over $70 billion.
Reasons Why You Should Own Some CCI Stocks
Shares of Crown Castle have been performing well lately. Over the past seven months, the CCI stock has rallied by over 9%, managing to outperform the wireless industry growth of 4.7%.
The rally is anticipated to continue in the short term due to several favorable factors.
Lately, the company has been working on expanding its fiber footprint, which is focused on the small cell opportunity by buying several small-cell deployment companies and fiber operators.
This puts Crown Castle in a strategic position to service the needs of both the current 4G and the upcoming 5G deployments as well as the enterprise demand for fiber.
The company’s third-quarter financial results have also been impressive. The telecom company reported adjusted funds from operations (AFFO) per share of $1.55 – a figure that surpassed the estimated $1.48, according to the Zacks Consensus Estimate.
Net revenues stood at $1.51 billion, which suggests a 10.1% year over year growth. This reflects the company’s high demand for infrastructure, extensive tower portfolio, and healthy leasing activity.
For those who don’t own the CCI stock just yet, we believe its time to take advantage of this growth stock since it’s poised to increase in value.
Factors Driving The CCI Stock Growth
Factors driving the growth of CCI stock include; high return on equity (ROE).
The company has a ROE of 8%, which is significantly higher than that of the industry average of 4.54%.
A clear indication of the optimal utilization of equity. Its a key factor that is likely to boost investors’ confidence in the telecom stock.
Solid FFO Growth – over the next year, the company’s FFO per share is estimated to grow by over 8.9%. Incredibly, over the next five years, the FFO per share is predicted to rise by over 15%.
Based on high demand for its tower and fiber assets, Crown Castle projects the FFO to range between $2,539-$2,584 million.
Finally, there is an increasing demand for the company’s small cell assets and towers by wireless carriers as they try to handle the growing volume of data being carried by wireless and wired networks.
5G is expected to roll out in the next year, and since the technology has a very limited range, to transmit it over wide areas, a lot of small cells will be required.
And since Crown Castle is the king of small cell area, one thing we can expect to see is the CCI stock perform even better than it is currently doing. Our sentiment is CCI is definitely a stock to buy.