Canada’s 5G Boom: The Best TSX Stocks to Buy

Canadians on the hunt for 5G development exposure should look to top TSX stocks like BCE Inc. (TSX:BCE)(NYSE:BCE) right now.

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The development of 5G has stirred excitement and intense competition around the world. Canada’s top telecommunications firms have stepped into the fray and are working feverishly to bolster access across the country. 5G is the fifth-generation technology standard for broadband cellular networks, the obvious successor to 4G networks. Today, I want to look at the best TSX stocks to buy as Canada pursues this technological upgrade. Let’s dive in.

Should you buy Rogers after its huge Shaw acquisition?

Rogers Communication (TSX:RCI.B)(NYSE:RCI) made waves this month after it announced its aim to acquire Shaw Communications. Shares of Rogers have climbed 10% month-over-month as of early afternoon trading on March 22. It spiked on news of the landmark deal. This TSX stock is up 28% from the prior year.

The proposed $20.8 billion deal to acquire Shaw will power Rogers’ 5G development, especially in rural Canada. This partnership is expected to bring reliable wireless connectivity to 99% of Eastern Ontario’s residents and businesses. Rogers will invest over $150 million in this project. The leading telecom will nearly double its broadband and video consumer customer base with the Shaw acquisition.

Shares of this TSX stock last had a price-to-earnings ratio of 19. This is well below the industry average. Moreover, Rogers offers a quarterly dividend of $0.50 per share. That represents a 3.3% yield.

Another TSX stock on the 5G path

Telus (TSX:T)(NYSE:TU) is a top 5G TSX stock I’d suggested investors should target in February. Shares of Telus have climbed 31% year over year at the time of this writing. The stock is up 3.3% in 2021 so far.

Opensignal, an independent mobile analytics company, recently ranked Telus ahead of its top rivals in an analysis of customers’ mobile experience. It won categories in 4G availability, 4G coverage experience, and games experience. Opensignal also noted that Canadian mobile operators were well into the 5G deployment cycle. Earlier this month, Telus selected the mobile transport and broadband access solutions provider DZS to accelerate its 5G and digital transformation.

This TSX stock last had a P/E ratio of 27, putting Telus in attractive value territory in its industry. Telus boasts a quarterly dividend of $0.311 per share, representing a solid 4.7% yield.

This TSX stock is spending big on 5G and offers a strong dividend

BCE (TSX:BCE)(NYSE:BCE) is a telecommunications giant that also boasts extremely valuable media assets. It holds interests in the Montreal Canadians and Maple Leaf Sports & Entertainment. Shares of BCE have climbed 4.4% in 2021 so far. The TSX stock is up 23% year over year.

In February, BCE announced that it would spend $1 billion to double its 5G coverage over the next two years. This is a bold strategy as BCE navigates what it calls a “transition year” in 2021 after its financials were hit hard by the COVID-19 pandemic in 2020. Still, in Q4 2020 the company saw a slight decline in adjusted earnings per share to $0.81 – down from $0.86 in the prior year.

Shares of this TSX stock possess a favourable P/E ratio of 22. BCE last announced a quarterly dividend of $0.875 per share, which represents a tasty 6.1% yield.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Ambrose O'Callaghan has no position in any of the stocks mentioned. The Motley Fool recommends ROGERS COMMUNICATIONS INC. CL B NV and TELUS CORPORATION.

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