Internet of Things Projections Point to Secular Growth For this Key Firm

The Internet of Things (IoT) tech trend is one of many such tech trends investors point to as signs of a big opportunity in tech investments over the next decade.

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  • IoT looks particularly attractive as it means the interconnectedness of a number of technologies today, even if the trend as a whole may not sound as exciting as, say, electric vehicles or cryptocurrencies.

    Any company that can play to this trend can likely earn a profit over the next few years. But a company that can provide key components for any IoT device is likely to make a bundle.

    One potential big winner? Qualcomm (QCOM). The wireless communication chip company is better known for supplying the tech that goes into smartphones. But that’s the same tech needed to hook up everything from smart glasses and VR headsets to self-driving cars and factories.

    The company’s announcement of product line expansion has led to a jump in shares in recent weeks. But trading at under 18 times forward earnings, and with a chance for years of increasing earnings, the stock still looks attractive here.

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  • Action to take: Investors who buy here can lock in a growing dividend starting at a 1.5 percent yield. With a relatively low payout ratio, chances are Qualcomm will keep paying out an increasing stream of cash for years to come.

    Traders may like the play the current uptrend. The March $195 calls, last going for about $9.40, offer the potential to leverage any further move higher in shares in the coming months.

     

    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.

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