American Tower is the largest real estate investment fund in terms of market capitalization. AMT is a leading global provider of wireless infrastructure that owns and operates more than 160,000 cell towers in the United States and abroad, and in March 2018, the company was ranked in 50th place on Fortune’s list of the World’s Most Admired Companies. This list is based on surveys of corporate executives, fund managers, analysts, journalists and others with experience in a company’s sectors. American Tower currently operates more than 160,000 cell towers in the United States and is the leading provider of wireless infrastructure services to wireless operators in the United States and abroad.
Over the past five years, the company has experienced an exceptionally high dividend growth rate. It’s time to compare face to face with another rival, European rival Vantage Towers (OTCPK: VTWRF). Although American Tower (AMT) and Vantage Towers (Vantage Towers) have distinctly different business structures, the former is more advanced than the latter.
Vantage has a global reach in 10 nations, while American Tower has an emerging market business worldwide. While it’s clear that there’s no reason to jump on the train, many unknowns and doubts remain about Vantage’s long-term viability. To meet investors’ return expectations, the company must be profitable in saturated markets. With a proven track record of excellent long-term results, American Tower is an excellent company to invest in. The company enjoys a 4.1% total organic tenant sales growth rate (TOTTON) resulting from the company’s acquisitions, double-digit cap rates for new buildings, and the demand for communication capabilities at a reasonable cost of capital.
American Tower is still a fast-growing stock
American Tower (AMT) has continuously provided a level of quality above the average, along with a rapid expansion, but the resulting evaluation justified these aspects. AMT has never been cheaper compared to the rest of the market. Investors no longer have to pay for extra growth due to the huge disparity between investment capitalization rates and AMT’s cheap cost of capital. Higher-than-normal returns on the towers allowed AMT to increase its operating cash flow per share from $2 to about $.
With FFO rising to $9.33 in 2021 and $US in 2022, consensus expects a substantial increase. At AMT’s growth rate, analysts note three main areas of growth: organic revenue growth, new construction, and M & M&A. In addition, the AMT issued 750 million euros of senior notes in May 2021, offering investors a 0.45% coupon. There’s no doubt about it: this REIT has the best spread of any of them at the moment. So it’s not just macro towers and satellites at risk, but 5G is threatening the chances of macro towers and satellites.
However, while 5G offers higher speeds, tiny cells have limited coverage, so they are only economically viable in high-density locations. 5G cell phones will not be in demand anywhere in the future, and we will have 5G hybrid internet for many years to come. Strict spreads, a vast pipeline, and a long period of remaining opportunities constitute AMT’s impressive growth. Although its growth is nearly double the index, the company’s stock price is trading at the exact multiple as the REIT index.
Telecom giants AT&T, Verizon, and T-Mobile are the most significant users of AMT. From FFO onwards, the corporation has a payout rate of around 60%. Over the past five years, the dividend has grown at an annual rate of almost 20%. Analysts are quite bullish on the AMT and feel the stocks are undervalued. Traders should look for the first warning signs when it’s time to exit.
American Tower Today
One company that investors may have difficulty finding trading at or below intrinsic value is SWAN stock, and American Tower Corp. (AMT) is one of those companies. FFO/share has increased 59% over the past five years, outpacing sales growth of 50%. AMT generated $8.2 billion in revenue over the past 12 months and, in 2020, was named one of the most admired companies in the world by Fortune magazine. An estimated total usage of more than 50 gigabits is predicted to be in effect by the year 2026, representing a CAGR of around 30%. Analysts predicted a capital expenditure of more than $35 billion in deploying 5G for AMT tenants, which would constitute a new industry record.
Telxius was recently acquired, bringing the number of company-owned communication sites to over 220,000. It is estimated that this will become a positive multi-year cash flow story starting in 2022. American Tower Corporation investors may have difficulty identifying an AMT stock that is trading in a range of value. With the help of 5G trends and increased mobile data usage, it has the potential to grow significantly. Analysts believe the AMT may be one of those ‘set it and forget it’ actions that generate income and capital gains, and make it a long-term Buy.
The world’s industry of towers and other wireless infrastructure is growing rapidly as consumers increasingly demand fast Internet and data access. Large investments are being made around the world to accommodate an expected 4G wireless expansion, and towers are being built at a record pace as demand has not diminished despite WiFi competition. wireless towers and infrastructure grew from $133 billion in 2015 to more than $220 billion in 2020. The rise of smartphones and the increased demand for wireless networks have fueled strong demand for wireless towers around the world. By the year 2019, mobile data traffic has grown 38,000 times, creating a huge demand for the infrastructure that carries the data.
AMT, as REIT, has rented wireless towers to operators such as Verizon Communications (VZ), AT & T Inc. (T) and T-Mobile US (STT). The sector is clearly a business that is working well. AMT has been around since 1991 and has transitioned from an original New York office rental business to a history of growth and high shareholder returns. While the $8.1 billion debt remains a bulge for AMT, the deal generates strong cash flow, which has allowed it to reduce leverage by more than 2X since 2013. The business model’s competitive advantage comes from having the exclusive asset of site equipment.
American Tower continues to be the market leader in the developing world and is continually expanding its presence in the United States. The company’s success with cloud communications has diversified its product portfolio as international growth becomes increasingly important. AMT’s brand, network infrastructure and financial position indicate that the company is undervalued by the market. It is currently yielding a substantial 5.52% and is trading at a discount to the S&P 500 of approximately 10%.