Tech Stocks to Buy: TE Connectivity (TEL)
Smarter cars will create a great deal of data, which will need to be transmitted to the cloud and between cars and other machines. This shall create demand for TE Connectivity Ltd’s (NYSE:TEL) connectors, more of which will need to be deployed in car electronics.
TE leads in connectors, with a 15.8% global market share, ahead of rival Amphenol Corporation (NYSE:APH) with 10.1%. TE also produces automotive sensors that create the data.
Citi projects that connectors will grow from being a $12.5 billion business in 2016 to a $16.5 billion one in 2021. TEL stock trades at 12 times earnings, 14 times forward earnings and 3 times book value. TE Connectivity stock also carries a 2.2% dividend yield and commands a 16.4% profit margin. TEL trades not far from its 52-week high.
TE Connectivity is not limited to automotive: its sensors and connectors are also used in smart homes, the energy sector, medical and many other sectors. TEL’s $24 billion market capitalization, however, makes it an unlikely takeover target.