The rise of mCommerce is inevitable, given the number of smartphones in circulation. By 2025, mCommerce is expected to double its shares of US retail sales. What are the best companies to buy to get exposure to the mCommerce rising trend?
mCommerce or mobile commerce is gaining a bigger share in retail sales worldwide. Unsurprisingly, given the number of smartphones in circulation and this is key to mCommerce, that is any financial transaction done via mobile.
We can include mobile banking, mobile payments, and mobile shopping in this category. To exemplify the rise in popularity of mCommerce, its share in the US retail sales is expected to double by 2025 and to reach 10.5%.
Therefore, businesses that use mCommerce stand to benefit from the increased adoption of mobile solutions, but so do companies that provide the infrastructure needed to build and further develop mCommerce solutions. Here are three companies to buy to ride the rise in mCommerce: IBM, Oracle, and Salesforce.
IBM developed a mobile commerce platform that includes various functions in an integrated package, such as marketing or customer service. Therefore, it is well-positioned to benefit from the rise in mCommerce, and the stock price looks attractive if we use the P/E ratio as a valuation metric. The stock currently trades at a P/E Non-GAAP (TTM) ratio of 14.62, lower than the sector median by -40.47%.
Oracle’s mobile e-commerce platform offers modules that support different selling models, among others. The company invested heavily in mCommerce solutions, and investors rewarded the management by sending the stock price up +41.66% YTD.
The rise in Oracle’s stock price is even more impressive if we consider the fact that this is a dividend-paying company. Oracle pays a quarterly dividend and has a dividend growth history of eight years. Valuation looks attractive as the P/E Non-GAAP (TTM) ratio is well below the sector median too.
Salesforce is another company well-positioned to benefit from the rise in mCommerce. Its Salesforce Commerce Cloud is a useful tool for businesses to streamline operations starting with the purchasing point and ending up with post-sale.
The stock price is up over 11% this year and it peaked at the start of November. Salesforce operates with a gross profit margin of 74.02%, much higher than the sector median.
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