Telecom & Wireless

Stocks to Buy as the Samsung Galaxy S4 Sales Boom

The Samsung Galaxy S4 smartphone went on sale the last week of April across 327 networks in 155 countries. The GS4 is reported to be flying off the shelves and is the top-selling phone at 57% of the stores that are carrying the consumer favorite. In fact, the closest smartphone in the sales race is Samsung’s own Galaxy SIII, the predecessor to the new model, with Apple Inc.’s (NASDAQ: AAPL) iPhone in third place.

Obviously Samsung is a big winner financially from the strong sales of the new smartphone. The UBS A.G. (NYSE: UBS) global technology and hardware analysts recently completed their research on who the winning vendors and suppliers are to the company. The winners are, as expected, industry leaders. However, one company that was expected to lose its supplier status made the cut, as well as some smaller, lesser known names.

Here is the list of stocks to buy that will have a direct benefit from the skyrocketing sales of the Samsung Galaxy S4 smartphone.

Intel Corp. (NASDAQ: INTC) has gone from technology icon to value stock. The UBS target for the chip behemoth is $22.50. The Thomson/First Call estimate is $23. Investors receive a solid 3.80% dividend.

Broadcom Corp. (NASDAQ: BRCM) is also a major supplier to Apple for the iPhone. The company recently launched its first 5G WiFi combination chips with 802.11ac technology that can be used in PCs, notebooks, tablets, smartphones and other connectivity devices. UBS has a $45 price target. The consensus target is $40. Investors are paid a 1.20% dividend.

Qualcomm Inc. (NASDAQ: QCOM) sells both chipsets, as well as collects royalties on all 3G and 4G smartphones that are being sold. UBS has a $75 price target on this top name to buy, but the consensus is even higher at $77. Shareholders are paid a 2.20% dividend.

Maxim Integrated Products Inc. (NASDAQ: MXIM) is the company that was expected to lose its vendor status but did not. The company carries a well-capitalized balance sheet, with more than $1.5 billion in cash on the books and a reasonable long-term debt to equity ratio of 30%. The UBS price objective is $37. The consensus is $36.05. Investors receive a solid 3.20% dividend.

STMicroelectronics N.V. (NYSE: STM) will supply chips that drive the audio functionality of the Galaxy S4. UBS has a $9 target, while the consensus estimate is higher at $11.50. Investors are paid a good 3.70% dividend.

Other vendors that are not covered by the team at UBS but stand to benefit are Skyworks Solutions Inc. (NASDAQ: SWKS), Synaptics Inc. (NASDAQ: SYNA) and MEMSIC Inc. (NASDAQ: MEMS).

Samsung has a home run with the Galaxy S4, and the vendors who supply the Korean giant are all expected to perform well the rest of the year. It may be important to remember that many of these names also pay solid dividends above the 3% level. With good potential for growth and dividends paid quarterly, many of the UBS stocks to buy are good total return candidates.

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