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2 5G stocks I’d invest in before 2020

Fiona Leake
A person holding onto a fan of twenty pound notes

5G promises to bring a revolution not only in the world of mobiles but in practically every industry. From ‘smart’ hospitals to fully automated warehouses, 5G is opening doors to technical opportunities that we’ve never seen before.

This also means that the stock market will benefit. As companies cash in by using 5G technology, more investors are going to start paying attention. I believe that it’s important to invest now before 5G is nationwide in 2020.

On the road to recovery

BT (LSE: BT.A) jumped 8% in September but the stock is still underperforming the market so far this year. However, it looks like things are slowly starting to look up for BT and I believe that it’s set to profit from the 5G revolution.

Currently, BT has a forward price-to-earnings of just 7.3 and a healthy dividend yield of 8.5%. These tempting figures are backed up by a promising focus on customer confidence in BT’s business plan.

This week, BT announced the new ‘Halo’ plan, a package that offers superfast broadband with unlimited 5G. It’ll also be the first provider to offer both broadband and 5G mobile in one package. On top of this, BT’s 5G went live on Friday in 20 cities, with the hope to bag more customers with the new 5G package.

To drum up further interest in its 5G offerings, BT is planning to transform 600 EE stores into dual-branded BT/EE stores across the UK. According to BT, this will put 95% of the UK population within 25 minutes of receiving help from a BT assistant. This focus on customer service will help to boost BT’s name in the industry.

BT has also said it will upgrade 700,000 customers and businesses around the UK to superfast broadband, free of charge, by June 2020. All of these efforts to improve customer confidence and grow as a business lead me to believe that BT shares will be rising in 2020.

Game-changer

Keywords Studios (LSE: KWS) is a gaming stock set to grow from 5G that some may overlook. The company will benefit from improved network speeds that will make gaming all the more appealing. It seems to have been in the right place at the right time, currently claiming to be the leading international technical services provider to the global video games industry. This is so important as gaming popularity has sky-rocketed in recent years and is only expected to grow more. 

Investors have been having the same positive sentiments towards gaming with Keywords’ value soaring 400% from September 2016 to August 2018. Furthermore, in its most recent update, the company stated that first-half revenue was set to be around 39% higher, to €153m, thanks to “particularly strong growth”. Pre-tax profits are also up 15% higher than the previous year.

On top of this, Keywords’ annual earnings per share have risen a significant 49% in the past three years. This is why I’m keen to cash in before 5G takes over in 2020 – I believe that we could see huge profits from investments.

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fional has no position in any of the shares mentioned. The Motley Fool UK has recommended Keywords Studios. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

Motley Fool UK 2019