The Best Canadian 5G Stock to Buy Right Now

Here’s why I think Rogers Communications (TSX:RCI.B)(NYSE:RCI) remains the top 5G pick in Canada’s telecommunications sector today.

| More on:
5G chip

Image source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

The 5G revolution is one that is perhaps less exciting than other paradigm shifts in the market. Indeed, the growth catalyst 5G provides for the telecom sector is one that’s a long burn. It will take many years for investors to reap the benefits of the infrastructure improvements telecom players are making today.

However, it’s undeniable the improvements that are coming via 5G. Improved data speeds and minimized latency provide a data-hungry user base with better, faster connectivity. And companies like Rogers Communications (TSX:RCI.B)(NYSE:RCI) are leading the way in bringing this technology to the masses.

Here is the key reason why investors are honing in on Rogers as an excellent long-term 5G pick.

Shaw Communications deal provides a tonne of potential upside

Without a doubt, the $20 billion takeover bid for Shaw Communications (TSX:SJR.B)(NYSE:SJR) is huge for investors. Indeed, it appears that there is a lot of optimism in relation to this acquisition. However, I expect this merger to be more beneficial for Rogers than Shaw.

Rogers will be able to roll out the 5G technology much faster than the other players in the market. Furthermore, this deal allows the company to expand its operations in Western Canada, which requires a significant amount of investment when it comes to 5G infrastructure.

Once this acquisition is complete, Rogers will become the second-largest telecommunications company in the country. It will overtake Telus to compete with BCE, which is currently leading the market. There’s huge upside for shareholders considering the potential size of this company following the completion of this takeover. Indeed, there’s plenty of optimism among analysts in relation to the potential value that could be generated once this acquisition is complete.

The acquisition is not a done deal yet

Investors must note that there’s still a lot of speculation going on as to whether this deal will eventually materialize or not. Since this takeover will be a game changer for the telecommunications space, a regulatory review will take place. Nevertheless, it appears that there’s a tonne of optimism around the deal going through right now.

Canada has a reputation for having a relatively lenient regulatory process when compared to that of other countries. Indeed, regulators of this country have given the green light to big deals similar in size and scale to this one recently. Accordingly, the market appears to be correctly pricing in lower regulatory risk with this deal today.

Indeed, I think if Rogers were to tie up with an international counterpart, this risk level would be much higher and would be priced accordingly.

Bottom line

With the race to 5G supremacy on, now’s the perfect time to start considering the best way to play this space. For those who believe this major acquisition will take place, Rogers is a great bet today.

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 Chris MacDonald has no position in any of the stocks mentioned. The Motley Fool recommends ROGERS COMMUNICATIONS INC. CL B NV.

More on Dividend Stocks

Woman has an idea
Dividend Stocks

2 Low-Risk Growth Stocks Paying Great Dividends

These top TSX dividend stocks give investors exposure to interesting growth opportunities.

Read more »

A person builds a rock tower on a beach.
Dividend Stocks

Got $300? 2 Simple TSX Stocks to Buy Right Now

These two simple TSX stocks have everything a long-term investor looking to dollar cost average into a position wants right…

Read more »

A golden egg in a nest
Dividend Stocks

Millennials: No Excuses! Start Saving for Retirement Right Now.

Millennials, we need to stop complaining and start bragging. We're great savers, so it's time to start investing in TSX…

Read more »

Value for money
Dividend Stocks

3 UNDERVALUED TSX Stocks to Buy in August

Here are some attractively valued TSX stocks for the long term.

Read more »

A young man throwing and catching his daughter above his head
Dividend Stocks

Parents: Double Your CCB Payments This Month!

Parents can use those CCB payments to their benefit and double them this year month after month -- no waiting,…

Read more »

stock market
Dividend Stocks

I’m Buying These 3 Resilient Stocks During a Bear Market

TD Bank stock is among the three stocks I'm buying to protect my portfolio from a bear market and to…

Read more »

edit Safety First illustration
Dividend Stocks

4 of the Safest Dividend Stocks on Earth Right Now

These dividend stocks offer up strong dividends, a cheap share price, and safety from growing, safe sectors of the market.

Read more »

A person builds a rock tower on a beach.
Dividend Stocks

Change Your Future: What to Hold in a TFSA in 2022

Holding dividend growth stocks in a TFSA long-term can change the financial futures of worried Canadians.

Read more »