During the late 1990s and well into the new century, one of the biggest buzzword phrases was “fiber to the premises,” or FTTP. The stated goal of many carriers and providers was getting fiber right up and into houses. Verizon Communications Inc. (NYSE: VZ) was somewhat successful in rolling out its FiOS initiative in 2005. While it never became ubiquitous due to cost and logistics, many customers have it and have lauded the outstanding video quality and Internet speeds.
A new research report from Jefferies says that FTTP is back in vogue, in large part due to the tremendous demand. The analysts point out that over the past year, the number of 1 Gbps broadband service announcements has been incredible, with 55 among significant operators in the United States. Jefferies makes the case that Google Fiber started this ramp-up in broadband activity when it announced its Kansas City roll-out in March 2011.
The Jefferies report includes a list of stocks that stand to benefit from this upswing in FTTP deployment. We screened the list for the top stocks that will benefit that make the most sense to investors. The four we chose are ADTRAN Inc. (NASDAQ: ADTN), Calix Inc. (NASDAQ: CALX), Cisco Systems Inc. (NASDAQ: CSCO) and Corning Inc. (NYSE: GLW).
This leading global provider of networking and communications equipment provides products that enable voice, data, video and Internet communications across a variety of network infrastructures. While the company missed first-quarter earnings, it has continued to roll out services to new accounts. Its ProCloud is a cloud-management service for Wi-Fi and switches. It features fully redundant infrastructure with guaranteed 99.99% uptime, 24/7 proactive monitoring and ongoing maintenance and hardware replacement.
ADTRAN investors are paid a 1.9% dividend. The Jefferies team has a rating of Hold for the stock and a $16.75 price target. The Thomson/First Call consensus price target is $17.34. Shares closed Wednesday at $16.31.