3 Telecom Stocks With Huge Return Potential for Long-Term Investors


  • Invest in these telecom stocks for an attractive risk/reward at this time
  • Nokia (NYSE:NOK): Gaining momentum in the 5G space, with over 286 commercial 5G deals
  • AT&T (NYSE:T): Forecasts a massive $16 billion in free cash flows this year
  • Telenor (OTCMKTS:TELNY): Trading at an attractive multiple while offering over a 7% dividend yield
Telecom Stocks - 3 Telecom Stocks With Huge Return Potential for Long-Term Investors

Source: AdityaB. Photography/ShutterStock.com

The spotlight typically shines on flashy growth sectors, leaving telecom stocks lurking in the shadows.

Yet, amidst the volatility in the stock market and concerns of a potential recession still ripe, these unsung heroes are stepping into the limelight.

Following last year’s stock market rout, these telecom stocks are emerging as attractive value plays for savvy investors seeking refuge in defensive sectors.

With strong dividend yields and minimal risk, these telecom leaders are poised to surge past their pre-pandemic values once the market starts rallying again, making telecom investing an enticing prospect.

The telecom industry is currently riding a wave of transformation on the back of 5G technology headwinds. As reported by Bloomberg, the global 5G services market will soar, with an astonishing 52% growth forecasted by 2030.

This revolutionary development promises to unlock immense possibilities across multiple sectors, including healthcare and transportation. Hence, wagering on the resilient and innovative telecom sphere is most apt.

NOK Nokia  $4.12
T AT&T  $17.70
TELNY Telenor  $12.13

Nokia (NOK)

a backdrop featuring the Nokia logo with a mobile phone featuring the Nokia logo on its screen in the foreground
Source: rafapress / Shutterstock.com

Once renowned as a popular smartphone developer of yesteryears, Nokia (NYSE:NOK) has re-emerged as a formidable force in the 5G landscape.

This telecommunications titan evolved over the past several years, thanks to its ongoing metamorphosis as a major stakeholder in the 5G race.

Under the agile leadership of CEO Pekka Lundmark, Nokia has returned to winning ways, establishing itself as the leading 5G business. Its remarkable turnaround is because of a combination of stellar execution, capital allocation prowess and growing demand for 5G technology.

As it looks to secure lucrative deals quarter after quarter, it’s hard to ignore its spectacular revenue growth across its core divisions. It has over 286 commercial 5G deals to its credit and is live in almost 100 5G operator networks.

Amid a rapidly changing telecom landscape, Nokia has emerged as a resilient player that cannot be overlooked.

AT&T (T)

AT&T logo on wooden background
Source: Lester Balajadia / Shutterstock.com

AT&T (NYSE:T) is a high-yielding telecom stock that should interest every income-seeking investor. It boasts an impressive 6% dividend yield, more than 90% higher than its sector median.

The firm’s commitment to rewarding its shareholders is evident in its 38-year streak of consistent dividend payments.

Despite a considerable debt load, AT&T has generated ample free cash flow to cater to its shareholder rewards.

For 2023, the firm projects an astonishing $16 billion in free cash flow, surpassing expectations by over 13% and its 2022 tally of $14.1 billion. Its CFO, Pascal Desroches, is upbeat about the firm’s ability to effectively weather the current economic challenges.

This is clear from its robust profitability profile, with its EBITDA and gross profit margin growth at 37.3% and 58%, respectively.

Telenor (TELNY)

A concept image of a cellphone tower with numbers surrounding it.

Norway-based Telenor (OTCMKTS:TELNY) is another high-yielding telcom stock, arguably one of the safest investments in its sector.

It boasts a strong foothold in the Nordic countries. It has a massive presence in several emerging Asian markets, making it an attractive long-term prospect for investors seeking quality telco opportunities.

Telenor’s strategic investments in key markets include its 56% stake in Bangladesh’s Grameenphone, full ownership of Telenor Pakistan, stakes in Malaysia’s CelcomDigi, and a significant share in Thailand’s True Corporation.

Its operating results have been mighty impressive, especially on the profitability front, with core metrics rising by double-digit margins.

Its stellar profitability helped build its spectacular cash war chest exceeding $1 billion, demonstrating its financial strength and resilience. Plus, its stock is trading at a substantial bargain to its historical averages, at just 1.8 times forward sales estimates.

On the date of publication, Muslim Farooque 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.

Muslim Farooque is a keen investor and an optimist at heart. A life-long gamer and tech enthusiast, he has a particular affinity for analyzing technology stocks. Muslim holds a bachelor’s of science degree in applied accounting from Oxford Brookes University.

Article printed from InvestorPlace Media, https://investorplace.com/2023/04/3-telecom-stocks-with-huge-return-potential-for-long-term-investors/.

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