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One of the big investment themes for the coming decade is related to 5G. And this movement could mean great things for 5G stocks.
The global 5G services market is expected to grow at a constant annual growth rate (CAGR) of 43.9% between fiscal year 2021 and FY2027. Furthermore, the 5G infrastructure market is expected to grow at a CAGR of 29% through FY2026.
Looking at the broader picture, 5G is likely to enable $13.2 trillion in global economic output by FY2035. Given the growth potential, there will be attractive investment opportunities in the industry.
With all of that in mind, this column will discuss some of the lesser known 5G stocks that have made inroads in the industry. I believe that these 5G stocks have the potential to create value with a long-term investment horizon.
Let’s dive into these three 5G stocks.
Lesser-Known 5G Stocks: Crown Castle International (CCI)
In an interesting podcast, Wharton’s Kevin Werbach and Jeffrey Reed from Virginia Tech opined the following:
“Telecom companies and other providers will have to invest billions to make 5G a reality — not only to buy more spectrum, but also to build out the infrastructure.”
Furthermore, with China outspending the United States on 5G network infrastructure, its likely that there will be a surge in infrastructure outlays.
That said, this makes Crown Castle International an interesting 5G stock to consider. The company has a portfolio of 40,000 towers, 70,000 small cells and 80,000 route miles of fiber.
So as 5G infrastructure spending ramp-up in the coming years, the company stands to benefit. In comparison, several major players like Verizon (NYSE:VZ), AT&T (NYSE:T) and T-Mobile (NASDAQ:TMUS) have already committed to build strong 5G networks in the coming years.
From a cash flow perspective, Crown Castle has $25 billion in contracted lease payment from top U.S. wireless carriers. In turn, this provides clear cash flow visibility in the coming years. This is an important point to mention as CCI stock currently has a forward dividend of $4.80. The current pay-out is likely to sustain and potentially increase in the coming years.
Editor's Note: Click here to keep reading.
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