Finance

TMUS, RCI, AMT: Which telecom stock has the most upside potential?


The telecommunications sector is home to some pretty cheap dividend payers that can help you grow your quarterly passive income stream. There is no doubt that the days of high interest rates may be numbered. If so, investors may need to return to the stock market to achieve higher-than-expected yields. 4.5% level. The good news (for potential investors) is that U.S. telecom stocks are under significant pressure today for a variety of reasons, including macro headwinds.

As rates drop, consumer pressure eases, and the next generation of connected devices comes online, look for the companies driving the 5G (and beyond) wireless boom to find ways to attract higher levels again.Therefore, this article will use TipRanks’ comparison tool checks out three telecom stocks with a Strong Buy rating This could bring huge value this season.

T-Mobile (NASDAQ: TMUS)

When it comes to telecommunications companies, it’s hard to find a company with half as much performance as T-Mobile. Up more than 135% in the past five years, while some of its biggest traditional rivals fell deeper into the red. A better network, lower prices, and perhaps lively promotions are the keys to increasing market share.

While its peers have been taking steps to catch up to the fast-growing wireless king, T-Mobile is likely to maintain its lead as it looks to further expand its leading 5G wireless coverage. There’s no doubt that T-Mobile is still the dominant 5G king, and I don’t see anyone threatening the company’s throne, at least not in the near future.

Having a best-in-class 5G network doesn’t happen overnight. It takes years or even decades of dedication and significant investment. Smart investments over the years have helped T-Mobile build a deep moat for itself. All things considered, I must say that I am as enthusiastic and bullish on this stock as Wall Street is.

Going forward, T-Mobile appears to be positioning itself to provide better connectivity to meet the needs of the next generation of (wireless) wearables. With recent partnerships that combine the best of 5G and spatial computing (or mixed reality headsets), it’s hard not to see T-Mobile as an enabler of spatial computing and one of the biggest beneficiaries of the rise of the Metaverse.

What’s the price target for TMUS stock?

Analysts say TMUS stock is a Strong Buy, with 17 consensus buys in the past three months. TMUS Average Price Target $186.73 implies an upside potential of 14.4%.

Rogers Communications Inc. (NYSE: RCI)

Rogers Communications, a Canadian telecommunications company, also has an impressive “Strong Buy” rating from analysts. However, unless you live in Canada, you probably haven’t heard of the company.

Unlike T-Mobile, which has been a winning investment for years, Rogers Communications stock has underperformed in recent years. The stock price has been declining not only over the past 5 years, but over the past 10 years. The stock is down 23.6% and 1% over the past 5 and 10 years respectively.

This is some serious underperformance, despite investors having collected decent capital dividend (Today, the forward yield is 3.62%), I think it’s safe to put RCI stock in the deadbeat category.Even with the dividend adjusted, the stock remains Down nearly 10% over the past five years Only grew 40% in 10 years.

However, some see the dividend being ineffective, others may see an opportunity to dig into some pretty deep value. Otherwise, why would most analysts be optimistic about the Canadian telecom company?

Perhaps the biggest reason to stick with Rogers Communications is the progress it made following last year’s merger with Shaw Communications, another Canadian telecom company. The deal faced numerous regulatory hurdles on its way to completion, with market power (particularly in Western Canada) concentrated in one company’s hands – a prominent concern for regulators but an opportunity for investors .

Looking ahead, analysts see synergies and strategic alignment as key advantages behind the deal. Edward Jones analyst David Heger noted that cost savings appeared to be realized more quickly than expected in recent meetings with Rogers. BNN BloombergWith that in mind, it’s hard not to be bullish on this long-term Canadian laggard that may be about to wake up.

Maybe the savings could be passed on to customers? If not, perhaps shareholders would benefit the most, most likely in the form of a significant dividend increase from the company in the future. Regardless, Rogers stock looks relatively cheap at just 11.5 times forward — a much lower price-to-earnings (P/E) ratio than TMUS, which trades at about 18 times forward.

Perhaps the stock’s biggest draw, though, is the implied upside potential, which stands at over 40% as of this writing.

What’s the price target for RCI stock?

Analysts say RCI stock is a Strong Buy, with nine consensus buys in the past three months. RCI average price target $57.71 implies an upside potential of 40.8%.

American Tower (NYSE: AMT)

American Tower is a real estate investment trust (REIT) that leases cell phone towers to customers. The REIT has encountered headwinds in recent years, causing its stock price to drop nearly 47% from peak to trough.Recently, AMT shares have seen slightly improved quarterly results (Sales in Q4 2023) on hopes of lower interest rates $2.79 billion vs. $2.74 billion expected), and optimistic guidance for the year ahead.

Make no mistake, with the bar set for 2024 so low and the tone more optimistic, it’s hard not to be bullish on the REIT as it looks to build on its newfound momentum, which has seen its shares rise more than 20% from last year’s lows.

American Tower appears poised to cash in on data center growth in the year ahead. Given the profound rise of generative artificial intelligence in the cloud (and its potential for edge computing), data centers seem to be the ideal choice. The company’s previous acquisition of data center business CoreSite paid off, likely setting the stage for an epic comeback for the under-appreciated cell tower REIT that’s about to reawaken again.

At the time of writing, the shares are trading at a forward price-to-earnings ratio of 26.7 times, making it a bit more expensive than the other two telcos in this article.Anyway, I did find 3.32%-yield It becomes a long-term winner as it leverages data centers to drive growth and further diversify its business.

What is the target price for AMT?

Analysts say AMT stock is a Strong Buy, with 12 buys and one hold in the past three months. AMT Average Price Target $229.92 implies an upside potential of 16.4%.

bottom line

For value-focused investors who like dividends or distributions, the telecom space appears to be rife with opportunities. While I’m a big fan of all three, I’m most interested in RCI stock because Wall Street sees the most gains (about 40%) in the year ahead. It’s also the cheapest of the three based on its price-to-earnings ratio.

expose



Source link

Related Articles

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button