The telecom services industry witnessed a great surge in demand over the past two years owing to the continuing remote working environment. The telecom sector is growing quickly with increased wireless deployment and…
the adoption of advanced technologies, including 5G, to meet high consumer demand. Last November, the $1 trillion Infrastructure Investment and Jobs Act allocated $65 billion for broadband adoption and deployment. Increased government funding and incentives are expanding telecom infrastructure and services to remote parts of the country.
The current, dynamic technological environment provides immense growth opportunities for telecommunication companies. According to a report by The Business Research Company, the global telecom market is projected to reach $2.87 trillion in 2022, growing at an 8.5% CAGR. The market is expected to reach $3.82 trillion in 2026, growing at a 7.4% CAGR, driven by increased demand for telecom hardware and services for household and commercial applications.
Given the telecom industry’s promising growth prospects, we think it could be profitable to invest in quality telecom stocks Nippon Telegraph and Telephone Corporation (NTTYY – Get Rating) and América Móvil S.A.B. de C.V. (AMX – Get Rating). These stocks are trading near their 52-week highs and are expected to rally in the near term.
Nippon Telegraph and Telephone Corporation (NTTYY – Get Rating)
NTTYY offers fixed voice-related, mobile voice-related, IP communications, and system integration services in Japan and internationally. It is headquartered in Tokyo, Japan. The company operates through five segments: Mobile Communications Business; Regional Communications Business; Long Distance and International Communications Business; Data Communications Business; and Other Business.
In December, NTTYY, in cooperation with the University of Tokyo and RIKEN, developed an optical fiber-coupled quantum light source. This is crucial technology for realizing modularized quantum light sources toward the fault-tolerant large-scale universal optical quantum computer. This launch is expected to boost the company’s profitability.
In its fiscal year 2022 nine-month period ended Dec. 31, 2021, NTTYY’s operating revenue increased 2.1% year-over-year to ¥8.92 trillion ($73.2 billion). The company’s operating income increased 2.5% year-over-year to ¥1.54 trillion ($12.65 billion). NTTYY’s profit rose 24% from its year-ago value to ¥1.03 trillion ($8.46 billion). Its earnings per share rose 27.7% year-over-year to ¥286.08.
The stock is currently trading 2.8% below its 52-week high of $30.84, which it hit on March 23, 2022. Shares of NTTYY increased 10.1% in price year-to-date and 11.3% over the past year. It closed yesterday’s trading session at $30.00.
NTTYY’s POWR Ratings reflect this strong outlook. The stock has an overall B rating, which translates to Buy in our proprietary rating system. The POWR Ratings assess stocks by 118 distinct factors, each with its own weighting.
NTTYY has an A grade for Stability and a B grade for Value. Within the A-rated Telecom – Foreign industry, it is ranked #7 of 46 stocks.
To see additional POWR Ratings (Quality, Sentiment, Momentum, and Growth) for NTTYY, click here.
América Móvil S.A.B. de C.V. (AMX – Get Rating)
Headquartered in Mexico City, Mexico, AMX provides telecommunications services in Latin America and internationally. The company provides wireless and fixed voice services, network interconnection services, data services, and other wireless entertainment and corporate services. In addition, AMX offers IT solutions, video, audio, media content, and residential broadband services.
Last September, AMX and Liberty Latin America Ltd. formed a joint venture by combining their respective Chilean operations, VTR and Claro Chile. With this joint venture, the parties involved expect significant…
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