Top Canadian 5G Stocks to Be Looking at for December 2022

Posted on December 8, 2022 by Nelson Smith

5G (Fifth Generation) is coming to Canada, and you won’t want to be left out of this new technology. It could easily be the next big investing theme.

We’ve essentially maxed out what 4G wireless networks are capable of. 4G technology can play video, load Facebook, and do a lot of other things, but it’s not very useful for the next generation of technology. We need faster speeds for true innovation tomorrow.

A world powered by 5G has the potential to be a revolutionary place. And whether you're just learning how to buy stocks or a seasoned veteran, you likely want a piece of the pie.

Self-driving cars and drones can zip about, using wireless signals to both get where they’re going and avoid each other. Remote health care will be much easier with ultra-clear video between you and your doctor.

The Internet of Things will allow numerous smart devices to communicate with each other, making overall commerce much easier. Heck, even smart cities will emerge, technological marvels that will change our lives in countless ways.

No wonder so many Canadian investors are excited about 5G stocks. This could prove to be one of the best growth opportunities in the entire market over the next decade or two, and they may be some of the best Canadian stocks to buy.

However, there is not much choice when it comes to Canadian 5G stocks. If you want the heaviest exposure to 5G, you'll likely want to look south of the border. Some potential companies to investigate there?

  • Verizon Communications
  • Qualcomm
  • Apple
  • AT&T
  • Nokia

However, we do have plenty of companies up here in Canada that do have some exposure to the booming industry, whether it be supplying and manufacturing equipment, wireless communications, building infrastructure, or providing services.

Let’s take a closer look at three top Canadian stocks that will have significant exposure to 5G over the next few years. Of note, Sierra Wireless used to be on this list. But in September of 2022, it was acquired by Semtech Corporation.

What are the best 5G stocks in Canada?

  • Blackberry (TSE:BB)
  • Rogers Communications (TSE:RCI.B)
  • Telus (TSE:T)

3.BlackBerry (TSX:BB)

There are a few ways BlackBerry (TSX:BB) could benefit from an upcoming 5G revolution.

Although the company isn't a big player in the handset business today, its brand is still worth something. It works with a partner that manufactures phones while the parent company still handles the design, marketing, and negotiations with wireless carriers. A good 5G phone would help the company regain some of its former handset glory.

Other parts of BlackBerry are poised to benefit even more from 5G, however. One example is the company’s self-driving car software division, which has ramped up to testing on Ontario streets.

While CEO John Chen claims the technology is at least a decade away from being adopted on a large scale, widescale 5G networks could help speed the process.

BlackBerry has other divisions that will benefit from full-scale 5G rollouts. The company is well-known as a security expert, and these networks will need to be protected from bad guys. It also looks to benefit from helping companies secure their own 5G-connected devices.

The company has also expanded into making software for smart devices. One big part of that business is the auto industry, with BlackBerry’s QNX software powering many in-vehicle entertainment systems. There’s potential to grow this part of the business significantly if ultra-fast 5G networks make it easy for machines to talk to each other.

In fact, the company recently signed a global multi-year deal with Amazon Web Services to continue designing its Blackberry IVY system, which will revolutionize the way auto manufacturers distinguish automobile data.

This is a stock that was unfortunately hit hard by the "meme stock" craze and as you can tell by the chart, it ballooned before cratering in value. However, now that it's back to somewhat reasonable prices, it's a stock to look at for 5G exposure in Canada today.

2. Rogers Communications (TSX:RCI.B)

Is Rogers the best telecom option here in Canada? I would say no, I much prefer Telus. However, there is no doubt the company is one of the most attractively valued telecoms in the country right now due to its poor performance over the last few years.

That, and the fact it arguably has the highest exposure to 5G here in Canada with its wide coverage and infrastructure. These factors put it firmly on this list of top 5G options. 

The company now provides 5G service to over 1,600 communities in Canada and it is continuing to roll out its 3500 MHz spectrum across the country, with more major rollouts expected in 2022 and 2023.

5G 3500 MHz is a mid-band spectrum of the 5G network that is anticipated to deliver faster speeds, and up to 50% more capacity so you can stream seamlessly and connect more devices in crowded spaces. Think of it as more lanes on a highway to be able to handle more traffic.

The company has also started to roll out 5G roaming, meaning you'll not only access 5G here in Canada as a Rogers customer but in the United States as well.

Rogers is part of the Big 3 telecom companies here in Canada, which form one of the strongest oligopolies outside of the railways. Rogers, Telus, and BCE control over 94% of the market share here in Canada, including many smaller subsidiaries that provide alternative services.

Rogers has been criticized for many years after deciding to stop growing its dividend and instead focus on internal growth. But there is no doubt its investments in 5G technology could provide outsized returns moving forward. 

This, plus the pending acquisition of Shaw Communications make it a very attractive option in the 5G space today.

1. Telus (TSX:T)

It’s obvious Canada’s wireless providers will be the real winners in such a world. This is why I’m naming Telus (TSX:T) as our top Canadian 5G stock pick.

Telus (along with its competition) is already aggressively investing in 5G equipment to upgrade its existing network.

Although Rogers Communications (TSX:RCI.B) did beat Telus by activating parts of its 5G network in 2020, Telus is not far behind.

Network upgrades for all of these telecoms will cost billions, but they’ll be worth it in the end. After all, Canadian telecom providers always find a way to keep their rates high. Do you really think you’ll have a cheaper cell phone bill once the networks are upgraded?

There will be multiple competitors in the Internet of Things sector. Many companies will be building software that connects smart devices with each other.

There will be multiple competitors on the hardware side, too. Canada’s telecom sector, meanwhile, won’t get caught up in any of that. They’ll make us pay whatever price they determine because these companies own the market.

What a fantastic spot to be in. And it's exactly why we've included 2 of the 3 major telecommunications companies in Telus and Rogers on this list.

I prefer Telus over its competitors for a couple of reasons. Firstly, it’s more of a pure telecom play. Rogers and BCE (TSX:BCE) own media properties and sports teams.

Secondly, Telus posts better-operating margins than its competition because of this focus on better businesses.

And lastly, Telus offers a unique combination of being one of Canada's best dividend stocks today in terms of dividend yield and dividend growth.

The bottom line on Canadian 5G stocks

5G is poised to become a very big deal, and Canadian investors don’t have to be left out. They can seize their share of the profits by investing in a few local 5G stocks. When it comes down to it, there is a very good chance the Canadian government forces telecom companies to cut cell phone bills. So, advancements in 5G technology will more than likely be the path to growth.

Telus looks poised to deliver solid returns without a whole lot of downside risk. That’s why it topped this list. Investors looking to take a little more risk in exchange for a better potential reward might want to look at BlackBerry or Rogers. If either of these companies takes off, their depressed shares could easily go higher.

Canada doesn’t have much of a tech sector, but it does have a handful of 5G stocks that can really make a difference in your portfolio. Stick with these names if you’re looking for a way to play the sector.

Disclaimer: The writer of this article or employees of Stocktrades Ltd may have positions in securities listed in this article. Stocktrades Ltd may also be compensated via affiliate links in this post.

Nelson Smith

About the author

Nelson is a dividend value investor who insists on buying great dividend-paying companies when they are reasonably priced. He has been investing for more than 15 years and is now primarily focused on helping other investors build up a dependable stream of passive income. When he's not studying the markets, Nelson can be found relaxing with his wife and cat or watching the Toronto Blue Jays.