The market for fifth generation (5G) wireless continues to grow. The global 5G market was valued at $60 billion in 2022, according to Grand View Research and is forecast to expand at a compound annual growth rate (CAGR) of nearly 60% between now and 2030. Given how powerful it is, 5G wireless is being used for much more than to surf the internet or watch videos on social media. Companies are relying on it to power artificial intelligence, cloud computing and Internet of Things (IoT) platforms and applications. Service providers are racing to keep up with demand and roll their 5G network coverage further afield. This could make 5G wireless stocks great investments. Given the growth of 5G and the strong demand for it, companies behind 5G technology and infrastructure can be expected to continue growing at a fast clip in the coming years.
Here are three high-potential 5G stocks to buy in 2023.
5G Stocks to Buy: AT&T (T)
After years of delivering mediocre returns, the shares of legacy telecommunications giant AT&T (NYSE:T) appear to now be in recovery mode. In the past 12 months, T stock has risen 5%, outperforming the broader tech sector. Analysts and investors appear to be warming to the company after it spun off the Discovery TV network and sold DirectTV to a private equity firm. These changes have allowed AT&T to concentrate on its core wireless business, which is focused on expanding its 5G coverage.
AT&T remains the world’s largest telecommunications company and the biggest provider of mobile telephone services in the U.S. Currently, the company has more than 200 million wireless subscribers. And AT&T is ranked number one in customer satisfaction surveys, so its customers will be loyal to it.
AT&T has said it plans to use the $50 billion generated from the Discovery and DirecTV sales to pay down debt. The company has also largely restored its dividend after cutting it during the pandemic. Today T stock boasts a dividend yield of 6.1%
Crown Castle (CCI)
Crown Castle (NYSE:CCI) is a real estate investment trust (REIT) that specializes in building and operating cell phone towers. The company operates one of the largest communications infrastructure networks in the U.S., including more than 40,000 cell towers and 85,000 miles of fiber. CCI stock has been pulled 28% lower over the past 12 months, mostly because of the stock market’s woes. But there are reasons to be upbeat about Crown Castle’s stock.
The stock is well below its 52-week high of $200, presenting a nice entry point for investors looking to buy the shares at a low point. CCI stock also pays a strong quarterly dividend of $1.56 per share, which equates to a yield of 4.9%. The company has a fairly large competitive advantage and potential competitors have to overcome high barriers of entry.
That’s because CCI and American Tower (NYSE:AMT) are among the two largest cell tower REITs in the U.S. And CCI has a steady and reliable income stream because it leases tower space to the top mobile carriers, including AT&T.
Crown Castle’s rental revenue grew 10% in 2022, continuing its longtime trend of delivering strong growth.
Turning overseas, we have Vodafone (NASDAQ:VOD), the British telecommunications giant that has operations all over the world. VOD stock gained 14% so far this year. The stock also pays a monster dividend that yields 8%. The stock, which has a price-earnings ratio of 15.30, looks fairly valued, and the company continues to expand its 5G wireless network and offerings.
Vodafone is also reportedly looking to streamline its operations by selling its Africa business, a move that could generate $14 billion for the U.K.-based company.
Even if it sells its Africa business, Vodafone would still have operations in more than 20 countries worldwide. While some investors gripe that Europe’s telecommunications market is bogged down by excessive regulations, Vodafone continues to be a major player in the sector. And it’s hard to ignore the high dividend yield of VOD stock.
On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.