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InterDigital and the "Living Network"

12/19/2016 8:00 am EST


Mark Skousen

Editor, Forecasts & Strategies, High-Income Alert

Our latest recommendation designs and develops advanced technologies that enhance mobile communications, including the 2G, 3G, 4G and new 5G platforms, explains Mark Skousen, editor of Five Star Trader.

For more than 40 years, InterDigital (IDCC) has pioneered mobile technology and contributed to global wireless standards, spending more than $1 billion on research and development.

The firm has helped advance more efficient wireless networks, a richer multimedia experience and new global broadband capabilities for billions of consumers around the world.

Right now, most of InterDigital’s research efforts are concentrated on what it calls “the living network,” where mobile devices self-optimize to deliver services that tailor content, context and connectivity to exactly suit users’ needs.

This network -- based on 5G -- will dramatically affect the way we live, work and interact. Indeed, 5G delivers enhanced mobile broadband and will help drive the new Internet of Things, delivering a fast, seamless, high-quality and secure experience.

If this all sounds a bit futuristic, rest assured that dramatic sales and profit growth are happening right now. In the most recent quarter, for instance, earnings at InterDigital soared 326% on a 108% increase in sales. The company’s operating margin is 56%. And management is earning an impressive 37% return on equity.

The stock is outperforming the market too, rising 58% over the last 12 months. Yet it is still more than reasonably priced at just 14 times trailing earnings.

And, in an unusual plus for a fast-growing tech stock, you’ll collect a dividend currently yielding 1.53%. This is a fast-growing tech company with excellent prospects and a compelling valuation.

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