China Telecom, STMicroelectronics and Other Tech Stocks Analysts Are Bullish On (CHA, STM)
Despite the uncertainty about the end of the Fed's quantitative easing, the slowdown of the Chinese economy and the ongoing economic difficulties in Europe, analysts are still optimistic about certain stocks.
Here is a quick look some dividend payers in the technology sector that have a consensus recommendation of analysts of Strong Buy. And based on their mean price targets, analysts see more than 10 percent potential upside in these stocks, relative to their current share prices.
Shares of ABB (NYSE: ABB) are trading about three percent higher than six months ago, following a more than three percent pop in the past two weeks. Analysts have overestimated the earnings per share (EPS) of this maker of power and automation technologies in the past four quarters.
The Swiss company has a dividend yield of more than three percent and a market capitalization of more than $49 billion. The long-term EPS growth forecast is greater than 11 percent. Over the past six months, the stock has outperformed competitor Siemens (NYSE: SI).
Advanced Semiconductor Engineering (NYSE: ASX) is more than six percent lower in the past six months, despite a more than five percent bump in the past two weeks. The Taiwanese provider of semiconductor packaging and testing services is expected to show more than seven percent revenue growth for this year.
Advanced Semiconductor Engineering has a market cap of more than $6 billion. The dividend yield is about 1.7 percent, and the long-term EPS growth forecast about 20 percent. Over the past six months, the stock has underperformed competitor Silicon Precision Industries (NASDAQ: SPIL).
China Telecom (NYSE: CHA) shares are down more than 13 percent in the past six months, and they have traded mostly between $46 and $48 since the end of May. The Beijing-based company is expected to post earnings and revenue growth of more than 12 percent this year.
This former state-owned monopoly has a market cap near $38.8 billion, a dividend yield of about 2.1 percent and a long-term EPS growth forecast of more than 14 percent. Over the past six months, the stock has outperformed China Unicom but underperformed Nippon Telegraph & Telephone.
China Unicom (Hong Kong) (NYSE: CHU) is down more than 19 percent from six months ago, and trading in the same neighborhood as a year ago. The provider of cellular and broadband services in China is expected to post more than 17 percent growth in revenue this year and about 14 percent next year.
China Unicom's market cap is near $31.5 billion, and the dividend yield is about 1.3 percent. The long-term EPS growth forecast almost 41 percent. The stock has underperformed rival China Telecom and the Nasdaq over the past six months.
Minnesota-based MTS Systems (NYSE: MTSC) saw its shares pull back about six percent in June, but they are still trading almost 11 percent higher than six months ago. The $926 million market cap company is expected to post lower EPS in the current quarter and the full fiscal year.
MTS Systems has a dividend yield is about 2.1 percent and a return on equity of more than 20 percent. Short interest is more than four percent of the float. Over the past six months, the stock has narrowly underperformed the likes of Illinois Tool Works (NYSE: ITW), as well as the broader markets.
Nippon Telegraph & Telephone (NASDAQ: NTT) is trading more than 23 percent higher than six months ago, though it has pulled back about three percent from a multiyear high in May. Its revenue and earnings both declined year-over-year in the most recently reported quarter.
Tokyo-based NTT has a $62.4 billion market cap and a dividend yield of about 3.7 percent. The long-term EPS growth forecast is only about four percent. The stock has outperformed the Dow Jones Industrial Average and the S&P 500 over the past six months.
The share price of STMicroelectronics (NYSE: STM) is up more than 24 percent in the past six months, as well as more than 81 percent in the past year. This Swiss semiconductor maker is expected to have swung to a small profit in the most recent quarter, despite a year-over-year slip in revenues.
The $8 billion plus market cap company has a dividend yield of more than four percent, but a long-term EPS growth forecast of only about five percent. Over the past six months, STMicroelectronics has outperformed NXP Semiconductors (NASDAQ: NXPI) and the broader markets.
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