China Mobile stock can be a profitable investment, here’s why

China Mobile stock can be a profitable investment, here’s why
Written by:
Stanko Iliev
14th September, 21:31
Updated: 14th September, 21:32
  • China Mobile is a stable company that pays a great dividend
  • The company is handling the coronavirus threat very well and it is attracting investors' attention
  • China Mobile stock is in the "BUY" zone

Shares of China Mobile (NYSE: CHL) extended its correction from the recent highs above $38, registered in the third week of August. Despite this, there is no reason to panic and as long the price of China Mobile stock is above $30 this stock is in the “BUY” zone.

Fundamental analysis: China Mobile stock is not overvalued

China Mobile is handling the coronavirus threat very well and it is attracting investors’ attention in this uncertainty on the financial markets. China Mobile provides mobile telecommunications in China, the company serves 950 million mobile customers and 187 million wireline broadband customers. China Mobile became a strategic partner of Nokia this year in order to deliver a landslide monitoring/early warning system for highway operations in Guangxi province.

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The company increased its revenue in 2019 to $107.12B from $107.11B in 2018 and the growth projects will ensure that the numbers will be moving up in the future. If we compare total stockholders’ equity of $159B and the market capitalization of $140B, we can notice that this stock is not overvalued and maybe now could be a good time to buy this stock.

Another useful information for potential investors is that this company has paid more than $24B dividends to its shareholders in the last three years and this number can be even bigger in the future. There are some obvious risks when it comes to buying China Mobile stock, but the current dividend makes it one of the steadier players in the region.

Technical Analysis: $30 represents a very strong support level

Data source: tradingview.com

When we take a look at the chart above ( one year period), we can see that the price of this stock has weakened from $44.9 to $30.12 and started to raise. On this chart, I marked important resistance and support levels.

The important support levels are $32 and $30, $36 and  $40 represent the resistance levels. If the price jumps above $36 it would be a “BUY” signal and we have the open way to $38. Rising above $40 supports the continuation of the bullish trend and the next price target could be located around $50. If the price falls even more in the upcoming period, every price in a range from $20 – $30 could be a very good opportunity for buying China Mobile stock.

Summary

Shares of China Mobile could be a profitable investment option and most financial analysts are also expecting its price to rise considerably in the next several years. China Mobile is handling the coronavirus threat very well and it is attracting investors’ attention in this uncertainty on the financial markets. There are some obvious risks when it comes to buying China Mobile stock, but the current dividend makes it one of the steadier players in the region.

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