Investors could do a lot worse than dial up their share portfolios for the long-run growth in the telecommunications sector.
Wide profit margins, significant industry growth, strong tailwinds and many ways to grow make telco stocks a very healthy addition to a well-diversified share portfolio.
Fortunately, Australia has no shortage of great stocks that an investor can consider buying today – despite the recent frenzy of acquisitions.
5 great telco stocks you can buy today
- Telstra Corporation Ltd (ASX: TLS)
Telstra is a household name in Australia thanks its dominance in the residential broadband, pay-tv and mobiles markets. With 16.7 million mobile subscribers and a soon-to-be-launched 'advanced' wireless network purported to be up to six times faster than the National Broadband Network, Telstra's title as Australia's leading telco is unlikely to change anytime soon.
- TPG Telecom Ltd (ASX: TPM)
TPG is now well and truly Australia's second largest telecommunications company, following its recent acquisition of rival iiNet. The acquisition, together with the ongoing organic growth and fibre network rollout, bode well for continuing outperformance by the company.
- M2 Group Ltd (ASX: MTU)
Whereas TPG is aggressively pursuing a push into the physical infrastructure behind communication networks (while also growing its retail offering), M2 Group is a big player in retail. The owner of Dodo, Primus, Eftel and Commander is also growing by acquisition, but is seizing an opportunity to grow into a broader range of utilities like power, gas and insurance through its Dodo brand.
- Vocus Communications Limited (ASX: VOC)
Fibre network operator, Vocus Communications, has enjoyed explosive success rolling out its infrastructure across the country. The addition of Perth-based telco and IT services business, Amcom Telecommunications, has significantly broadened the group's reach and positions it well for long-term growth.
- My Net Fone Limited (ASX: MNF)
My Net Fone is a $240 million company specialising in the provision of Voice over Internet Protocol (VoIP). It's experienced exceptional growth in recent years, thanks to a shift by businesses from traditional voice networks to data-driven communication. It's certainly one to watch closely.
Buy, Hold or Sell
Adding any of these five growing telco businesses to a diversified stable of quality businesses could prove very rewarding over the long-term. If I were after dividends, Telstra would be my pick for income. But if long-term growth was on the cards, I think Vocus would be the telco I'd consider first.
