The popularity of the hybrid work culture has fostered greater demand for high-speed connectivity. The accelerated deployment of 5G and the widespread adoption of internet technologies are now the main growth drivers of the telecommunications industry.
The industry is changing rapidly to keep abreast of the increased market demand for broadband connectivity. In addition, companies are focusing on developing next-generation AI-based applications to strengthen their market positions. The global telecommunications services market is expected to reach $ 2.47 trillion by 2028, with a CAGR of 5.4% of 5.4%.
In this context, we think of quality international telecom stocks, América Móvil, SAB de CV (AMX), Public joint-stock company of Mobile Telesystems (MBT), and Millicom International Cellular SA (TIGO) could be solid additions to his portfolio now.
América Móvil, SAB de CV (AMX)
AMX provides integrated telecommunications services in Latin America and around the world. The company’s offerings include fixed wireless voice and data services. He is based in Mexico City, Mexico.
On September 15, AMX announced its intention to sell 100% of the interest in its subsidiary Claro Panama, SA to Cable & Wireless Panama, SA, a subsidiary of the major telecommunications company Liberty Latin America LTD (LILA). The agreed sale price of $ 200 million is expected to improve AMX’s cash flow.
In its fiscal second quarter 2021, AMX’s total revenue grew 0.4% year-on-year to MEX $ 252.51 billion ($ 12.55 billion), while its profit net increased 119.6% over the same period last year to 42.82 billion MEX dollars (2.13 billion dollars). The company’s profit per ADR increased 156% year-over-year to $ 0.64.
A consensus EPS estimate of $ 0.32 for the current quarter (ending September 2021) indicates a 23.1% year-over-year increase. Likewise, the consensus estimate of revenue of $ 12.80 billion for the current quarter reflects an 8.6% year-over-year increase. AMX gained 46.9% going over the past year and 23.4% year-to-date to close yesterday’s trading session at $ 17.94.
AMX’s strong fundamentals are reflected in its POWR odds. The stock has an overall A rating, which equates to a strong buy in our proprietary rating system. POWR scores are calculated by considering 118 separate factors, each factor being weighted to an optimal degree.
AMX has a growth, value, stability and quality rating of B. In stock of 48, rated A Telecom – Foreign industry, it is ranked No. 1. Click here to see additional POWR ratings for AMX (Momentum and Sentiment).
Public joint stock company of Mobile Telesystems (MBT)
MBT is a telecommunications service provider operating primarily in Russia. It provides voice and data transmission and Internet access. The company is a subsidiary of Sistema Public Joint Stock Financial Corporation and is based in Moscow.
On September 16, MBT signed a definitive agreement to acquire a 70% stake in Sistema Capital LLC. MBT will be a 100% shareholder of Sistema Capital following this acquisition. With this decision, the company plans to expand its service portfolio and strengthen its position in the market.
In July, MBT and venture capital firm Digital Horizon acquired the controlling stake in an innovative blockchain-based platform owner, Factorin LLC, for 867 million rubles ($ 11.84 million). The deal is expected to enable the company to provide enhanced services to its B2B customers and accelerate its long-term growth.
For its fiscal second quarter, ended June 30, MBT’s revenue increased 10.6 percent year-on-year to 128.58 billion rubles ($ 1.76 billion). Its operating profit rose 15.5 percent from the previous year quarter to 30.42 billion rubles ($ 415.34 million). Its profit for the period from continuing operations was 17.43 billion rubles ($ 238.04 million), up 52.4 percent from the previous year quarter. And its total EPS grew 52.3% year-on-year to 10.10 RUB.
Analysts expect EPS to rise 6.9% year-on-year to $ 0.31 in the current quarter (end of September 2021). Likewise, Street’s $ 1.86 billion revenue estimate for the current quarter shows a 10.1% year-over-year increase. The stock has gained 7.8% over the past year to close yesterday’s trading session at $ 9.70.
It’s no surprise that MBT has an overall rating of B, which translates to Buy in our POWR rating system.
The stock has a B rating for value, stability, and quality. In addition, it is ranked 9th out of 48 stocks in the Telecom – Foreign industry. To see additional POWR ratings for Growth, Momentum, and Sentiment for MBT, Click here.
Millicom International Cellular SA (TIGO)
TIGO is a mobile operator based in Luxembourg. The company provides a wide range of digital services through its Tigo and Tigo BusinessMT brands.
On July 8, TIGO announced that it would invest $ 135 million to upgrade its mobile network in Honduras, Paraguay and Bolivia. In addition, the company has taken the initiative to partner with Swedish communication infrastructure company Telefonaktiebolaget LM Ericsson (publ) (ERIC). Commenting on this company, Xavier Rocoplan, EVP, Chief Technology and Information Officer at TIGO, said: “Millicom has a strategy to achieve and maintain network leadership in all the markets in which it operates. We want to deliver the best mobile experience on the market and connect more people in urban and rural areas.
TIGO’s revenue increased 12.3% year-on-year to $ 1.09 billion in its fiscal second quarter ended June 30. Its gross margin and operating profit improved 15.5% and 45.7%, respectively, to $ 777 million and $ 135 million.
The street EPS estimate of $ 0.27 for the current quarter (ending September 2021) reflects a 154% year-over-year increase. Likewise, Street’s $ 1.66 billion revenue estimate for the current quarter shows a 7.6% increase over the same period last year. The stock has gained 16.7% over the past year to close yesterday’s trading session at $ 35.42.
TIGO’s POWR ratings reflect this promising outlook. It has an overall A rating, which translates into a strong buy in our POWR rating system. The stock also has an A rating for growth and stability. It is ranked # 6 in the Telecom – Foreign industry.
In addition to the POWR ratings we have shown above, we can see the TIGO ratings for value, dynamics, feeling and quality. here.
AMX shares were unchanged on Wednesday after trading hours. Year-to-date, AMX has gained 26.56%, compared to an 18.26% increase in the benchmark S&P 500 over the same period.
About the Author: Anushka Dutta
Anushka is an analyst whose interest in understanding the impact of broader economic changes on financial markets motivated her to pursue a career in investment research. Following…