The Secret Mobile Stocks [Apple Inc., China Mobile Ltd. (ADR), AT&T Inc., Verizon Communications Inc.]

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June 13, 2014 11:52am NASDAQ:QQQ

iphoneGeorge Leong: Many of you may think AT&T Inc. (NYSE:T) and Verizon Communications Inc. (NYSE:VZ) are some of the best ways in the stock market to play the mobile sector, but there are other choices; it’s just that you need to leave our friendly borders.


The biggest growth area for mobile is found in the emerging markets. I’m talking about such countries as Brazil, India and, the biggest one of them all, China.

China has the most dominant mobile market in the world. There are over one billion subscribers and counting as the rural population comes on board. Think about it this way: there are more people on the country’s mobile network than in the U.S. and the European Union combined! What a massive market. And I think our readers should get a taste of it.

Now, you may think there are dozens of mobile providers—so how will you choose? But the truth is that the Chinese government decides on how many major operators are allowed. The country currently has three major mobile providers with access to the massive market potential.

Apple Inc. (NASDAQ:AAPL) has significant potential in the country, especially with its recent alliance with China Mobile Limited (NYSE:CHL). China Mobile is the biggest mobile phone operator in China, with about 785 million subscribers as of April 30. That’s a lot of business.

With a market cap of around $199 billion, the company is massive. By comparison, AT&T is the largest mobile provider in the U.S. with a market cap of $181 billion, and Verizon has a market cap of $204 billion.

China Mobile Ltd Chart

Chart courtesy of www.StockCharts.com

China Mobile has been ranked the top brand in BusinessWeek’s “20 Best China Brands.” The stock pays an annual dividend of $1.88 for a current dividend yield of 3.8%, based on the prevailing stock price of $49.43 on June 10.

And while China Mobile is already king of the mobile space in China, the company is also expanding outside of its borders. The company announced an $880-million purchase for an 18% stake in Thailand-based True Corp.

China Mobile already owns Bertrange-Luxembourg-based Millicom International Cellular S.A., a telecom operator with about eight million subscribers in Central America, South America, Africa, Pakistan, Sri Lanka, and Southeast Asia.

So while China is clearly the dominant and key focus market, China Mobile is showing that it wants to expand into other emerging mobile markets via acquisitions.

I think China Mobile has what it takes; it’s definitely a company to watch.

This article is brought to you courtesy of George Leong from Profit Confidential.


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