The best 5G network provider in Canada (Rogers) is available to roughly half the population (19 million people) and 1,500 communities, mostly concentrated around major population clusters.
From the Internet of Things (IoT) to the 4th industrial revolution, 5G’s growth potential is enormous, and in Canada alone, it’s expected to create about a quarter of a million new jobs.
So the best 5G stocks in Canada may experience a lot of growth in the coming years, following the organic growth of the underlying companies.
What Do You Need To Know Before Investing In 5G Stocks
5G is the latest cellular technology/wireless network available.
It’s radically different from the previous iteration, i.e., 4G, as it allows you to send more data much faster.
5G is less capable of penetrating walls compared to 4G, so it may require local boosters. It also requires more cell towers because a 5G cell tower is not able to cover the same area a 4G tower could. This adds to the cost of deployment of 5G.
Most of the best 5G stocks in Canada represent telecom companies. They may also include companies associated with the technology through hardware.
But electronic hardware, microprocessors, and other top-of-the-line components required for 5G are not manufactured in Canada.
In fact, three out of four companies that create 5G chipsets are from Asia (China, South Korea, and Taiwan). Only one, Qualcomm, is from the US.
Best 5G Stocks In Canada
The best 5G stocks in Canada are mostly telecom companies, each at a different level of target market penetration, with different challenges and opportunities.
1. BCE Stock
- Ticker: BCE.TO
- Industry Niche: Telecom, Mass Media, Internet
- Forward Dividend Yield: 5.78%
- Dividend Payout Ratio: 109.41%
- Dividend Yield (12-Month Trailing): 7.11%
- Upcoming Dividend Date: Jan 15, 2024
- Market Cap: $49.04 Billion
- Forward P/E Ratio: 16.54
BCE is the telecom giant in Canada, i.e., the largest company by market capitalization and one of the largest by consumer numbers in multiple areas, including wireless.
It’s also one of the largest players in the 5G arena. Bell 5G is considered one of the best in the country by some experts.
Its coverage is quite extensive and is on its way to covering 70% of the Canadian population with its 5G network, with top speed reaching up to 1.7 Gbps.
It also boasts about double the number of towers as Rogers, the next largest 5G network.
As a stock, BCE offers a healthy combination of capital appreciation potential and dividends, with the latter being more prominent. Its capital appreciation alone between May 2012 to May 2022 was about 63%, whereas the overall returns (including dividends) were about 173%.
It’s pursuing 5G growth with partners like Ericson and Nokia and has other strengths as well, like the largest fibre-optic network in the country.
2. Telus Stock
- Ticker: T.TO
- Industry Niche: Telecom, Mass Media, Internet
- Forward Dividend Yield: 4.65%
- Dividend Payout Ratio: 97.73%
- Dividend Yield (12-Month Trailing): 5.94%
- Upcoming Dividend Date: Jan 02, 2024
- Market Cap: $35.01 Billion
- Forward P/E Ratio: 21.87
Telus is the second largest telecom company (by market cap) in Canada and another in the trio of the three telecom giants that control the bulk of the Canadian market.
It boasts a decent number of wireless users and stands out for the healthy retention rate of its customers across different dimensions (wired, cable, etc.).
The 5G network already reaches about 744 Canadian communities, and by 2024, it expects to reach roughly 70% of the Canadian population.
Its presence is quite prominent in Alberta and British Colombia, Ontario, and Quebec, though penetration is severely lacking in Saskatchewan and Manitoba.
The Telus stock is a relatively stronger and consistent grower, which has seen price growth of about 113% between May 2012 to May 2022. On average, that’s about 11% appreciation a year.
Couple that with its usually juicy yield, and it can be considered one of the best 5G stocks in Canada.
3. Rogers Communication Stock
- Ticker: RCI-A.TO
- Industry Niche: Telecom, Internet, Home Monitoring
- Forward Dividend Yield: 3.46%
- Dividend Payout Ratio: 15.02%
- Dividend Yield (12-Month Trailing): 3.4%
- Upcoming Dividend Date: Jan 02, 2024
- Market Cap: $31.04 Billion
The third-largest telecom company in Canada is also the top player when it comes to 5G. It already reaches over 1,500 Canadian communities and 19 million Canadian, i.e., roughly half the population.
Neither BCE nor Telus is anywhere close to these numbers. The early bird advantage can help propel the company’s finances (with the stock following the trail) as more and more people are connected to and are opting for the 5G.
This also gives the company to dominate the communities the other two giants haven’t reached yet, and if it can retain the customers long-term, it can keep dominating the 5G market, at least until 6G arrives.
It has been a decent grower and returned about 77% to its investors between May 2012 to May 2022 through price appreciation alone. It also pays dividends and usually has a healthy yield, though not on par with the other two.
4. Quebecor Stock
- Ticker: QBR-A.TO
- Industry Niche: Telecom, Media, Sports, and Entertainment
- Forward Dividend Yield: 4.34%
- Dividend Payout Ratio: 46.37%
- Dividend Yield (12-Month Trailing): 3.72%
- Upcoming Dividend Date: Dec 19, 2023
- Market Cap: $7.14 Billion
Quebecor is an unexpected player in the 5G arena, especially considering that Shaw Communication, the fourth largest telecom company in Canada, didn’t bid for 5G licenses.
In contrast, Quebecor spent about $830 million in 2021 to buy 294 licenses for regions that cover around 30 million population. Its decision to buy 5G airwaves in Western Canada was challenged in a federal court by Telus though the case was dismissed.
The company primarily operates in Quebec, but the bulk of its 5G investment is outside the province, mainly in Ontario, Manitoba, Alberta, and BC. It already has 1.5 million wireless customers, and with its 5G penetration, it may emerge as a serious competition to the big three.
Quebecor has been a powerful and consistent grower, especially in the last decade. It grew its price by about 200% between May 2012 to May 2022, and it also offers a promising yield.
If it maintains its growth pace and dividends in the future, it may well become the best 5G stock in Canada, despite 5G being only a small portion of its offering.
5. TeraGo Stock
TeraGo is a B2-B company serving about 1,800 businesses, mostly in Canada. It offers a number of tech solutions to its customers.
Under the TeraGo 5G banner, the company holds the largest nationwide millimetre wave spectrum in the country. It has a presence in the seven largest Canadian cities and aims to offer fixed wireless solutions (using 5G).
However, most of its solutions are in the Proof of Concept (PoC) phase right now. But if they start paying off and the company starts gaining traction in the target market (corporate), it might see powerful growth.
So far, the micro-cap TeraGo stock has been quite cyclical in nature.
Best American 5G Stocks
6. Verizon Communications Stock (NYSE)
- Ticker: VZ
- Industry Niche: Telecom
- Forward Dividend Yield: 5.70%
- Dividend Payout Ratio: 51.41%
- Dividend Yield (12-Month Trailing): 7.02%
- Upcoming Dividend Date: Nov 01, 2023
- Market Cap: $157.28 Billion
- Forward P/E Ratio: 8.84
Verizon is the largest wireless provider (by far) in the US. And this impressive presence is also reflected in its powerful 5G network, which covers over 2,700 cities with a population of over 200 million. It also boasts the best wireless quality in the country.
Verizon stock is a better buy for its dividends than its capital appreciation potential. Its juicy yield and USD payouts can be quite potent for a Canadian investor.
7. Qualcomm Stock (NASDAQ)
- Ticker: QCOM
- Industry Niche: Tech, Semiconductors
- Forward Dividend Yield: 2.00%
- Dividend Payout Ratio: 24.73%
- Dividend Yield (12-Month Trailing): 2.43%
- Upcoming Dividend Date: Dec 14, 2023
- Market Cap: $142.19 Billion
- Forward P/E Ratio: 13.45
Qualcomm is one of the largest 5G chipmakers in the world and the largest in North America, but that’s just one element of its powerful portfolio which covers everything from mainstream WiFi products and upcoming AI-based devices and solutions.
Its 5G product portfolio is quite extensive, with about 18 products in multiple categories, catering to target markets like IoT, mobile computing, networking, and healthcare.
The Qualcomm stock has been a powerful grower and returned about 134% between May 2012 to May 2022 through price appreciation alone. It also offers healthy dividends.
However, as the US leans more towards domestic 5G production, the company’s finances and the stock may experience a steady yet powerful rise.
Q-1: What Is The Number One 5G Stock In Canada?
Ans.: Rogers Communication from a market penetration perspective and Quebecor from a returns perspective (historically).
Q-2: What Companies Are Involved In 5G In Canada?
Ans.: The three telecom giants BCE, Telus, and Rogers Communication, are most aggressively involved in 5G in Canada. Other companies like Sierra Wireless and TeraGo are focused on 5G-based hardware and other solutions.
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The unique challenges associated with 5G deployment are preventing telecom companies in Canada from achieving nationwide coverage.
However, even when that milestone is achieved, 5G’s overlap with IoT will offer unprecedented and explosive growth opportunities.
So if you invest in the best 5G stocks in Canada now, you may get to ride this growth train with your 5G holdings.
And if you have you are looking for something more solid than wireless waves, then these semiconductor stocks might be a better fit.