AT&T Inc. (T), Verizon Communications Inc. (VZ): Invest in This Telecomm Giant for Yield Without the Market Maturity

Maturity… an emerging concern in the U.S. but not China

Buying shares of AT&T and Verizon Communications Inc. (NYSE:VZ) will give you yield, but know that these companies are dealing in the United States where smartphone sales grew year-over-year by only 9% in Q2, according to Forbes. What about China? China Mobile is just now looking to expand into 4G. 3G penetration in China is only at about 20%, and may be poised to pass the States as the largest market for smartphones soon. China Mobile dominates in its domestic market, and is positioning itself to dominate in the future by investing in 4G ahead of competitors, as well. Saturation of the U.S. market may be far away, but maturity will most likely be approaching much faster in the States than in China.

The bottom line

China Mobile is a telecommunications mega-cap that is attractively valued at current levels. It offers a relatively good dividend, and what it lacks in yield it compensates with its potential for growth. As the Chinese market for smartphones and other mobile devices grows and expands, China Mobile will be at the forefront. Investing in the company also gives investors a bonus- relatively safe emerging market exposure. Unlike American telecoms such as AT&T and Verizon, the company doesn’t need to rely on the iPhone to attract new subscribers, either, and can avoid the heavy Apple subsidies. China Mobile is an investment offering both growth and yield- a rare blend for most mega-cap companies that isn’t seen everyday, and makes a good alternative (or even complimentary) investment to the more mature U.S. carriers.

All financial data obtained by Yahoo Finance

The article Invest in This Telecomm Giant for Yield Without the Market Maturity originally appeared on Fool.com and is written by Joseph Harry.

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