It's Tower Time

seekingalpha04-22

Communication has come a long way since the dawn of time, from limited means of visuals and sounds to the development of written language.Slow communication in the past led to battles being fought ...

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}\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nIt's Tower Time\n</h2>\n\n<h4 class=\"meta\">\n\n\n2024-04-22 19:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://seekingalpha.com/article/4685022-its-tower-time><strong>seekingalpha</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Communication has come a long way since the dawn of time, from limited means of visuals and sounds to the development of written language.Slow communication in the past led to battles being fought ...</p>\n\n<a href=\"https://seekingalpha.com/article/4685022-its-tower-time\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"LU0868494617.USD","symbol_name":"UBS (LUX) EQUITY SICAV - US TOTAL YIELD SUSTAINABLE \"P\" (USD) ACC","start_time":0,"source_url":"https://seekingalpha.com/article/4685022-its-tower-time","article_id":"2429594119","we_media_id":null,"thumbnails":["https://static.seekingalpha.com/cdn/s3/uploads/getty_images/165838058/image_165838058.jpg"],"rights":null,"url":"https://stock-news.laohu8.com/highlight/detail?id=2429594119","pubTimestamp":1713783600,"sourceInfo":{"source_id":"seekingalpha","name":"Seeking Alpha"},"weMediaInfo":null,"summary":"Communication has come a long way since the dawn of time, from limited means of visuals and sounds to the development of written language.Slow communication in the past led to battles being fought even after wars had been settled, such as the Battle of New Orleans in 1815.American Tower, Crown Castle, and SBA Communications are three leading cell tower REITs that offer stable cash flows and outsized total return prospects.   alengo/E+ via Getty Images How far communication has come since the dawn of time. Back in the beginning, people had very limited means of getting their points across. They could use visuals – if they were close enough to see – like hand gestures, body language, and facial expressions. Or they could use sounds – if they were close enough to hear – like words, grunts, and cries. The development of written language was therefore a major breakthrough, allowing people to communicate across greater distances. Only problem was…","collect":0,"end_time":0,"defaultTopTitle":"seekingalpha.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"LU0868494617.USD":"UBS (LUX) EQUITY SICAV - US TOTAL YIELD SUSTAINABLE \"P\" (USD) ACC","LU0276348264.USD":"THREADNEEDLE (LUX) GLOBAL DYNAMIC REAL RETURN\"AUP\" (USD) INC","SBAC":"SBA通信","BK4561":"索罗斯持仓","T":"美国电话电报","VZ":"威瑞森","BK4581":"高盛持仓","LU0708994859.HKD":"TEMPLETON GLOBAL \"A\" (HKD) ACC","BK4219":"电信塔房地产信托","LU0127658192.USD":"EASTSPRING INVESTMENTS GLOBAL TECHNOLOGY \"A\" (USD) ACC","AMT.AU":"ALLEGRA MEDICAL TECHNOLOGIES","BK4549":"软银资本持仓","LU1571399168.USD":"ALLSPRING GLOBAL LONG/SHORT EQUITY \"IP\" (USD) ACC","LU1585245621.USD":"EASTSPRING INV GLOBAL LOW VOLATILITY EQUITY FUND \"A\" (USD) ACC B","BK4104":"贸易公司与经销商","TMUS":"T-Mobile US Inc","IE00B775SV38.USD":"NEUBERGER BERMAN US MULTICAP OPPORTUNITIES \"A\" (USD) ACC","LU0128525929.USD":"TEMPLETON GLOBAL \"A\" (USD) ACC","IE00B3S45H60.SGD":"Neuberger Berman US Multicap Opportunities A Acc SGD-H","LU1988902786.USD":"FULLERTON LUX FUNDS GLOBAL ABSOLUTE ALPHA \"I\" (USD) ACC","LU0098860793.USD":"FRANKLIN INCOME \"A\" INC","GB00BDT5M118.USD":"天利环球扩展Alpha基金A Acc","BK7007":"医疗保健设备","BK4585":"ETF&股票定投概念","AMT":"美国电塔","BK4507":"流媒体概念","LU0208291251.USD":"FRANKLIN MUTUAL U.S. VALUE \"A\" (USD) INC","LU0310800379.SGD":"FTIF - Templeton Global A Acc SGD","LU1280957306.USD":"THREADNEEDLE (LUX) US CONTRARIAN CORE EQUITIES \"AUP\" (USD) INC","IE00BMPRXR70.SGD":"Neuberger Berman 5G Connectivity A Acc SGD-H","LU1914381329.SGD":"Allianz Best Styles Global Equity Cl ET Acc H2-SGD","LU0321505868.SGD":"Schroder ISF Global Dividend Maximiser A Dis SGD","CCI":"冠城","LU0321505439.SGD":"Schroder ISF Global Dividend Maximiser A Acc SGD","LU0320765646.SGD":"FTIF - Franklin Income A MDIS SGD-H1","BK4132":"无线电信业务","FAST":"快扣","LU2264538146.SGD":"Fullerton Lux Funds - Global Absolute Alpha A Acc SGD","LU1621767737.EUR":"AZ EQUITY GLOBAL INFRASTRUCTURE \"AAZ\" (EUR) ACC","LU2384288077.EUR":"AZ EQUITY GLOBAL INFRASTRUCTURE \"A-INS\" (EUR) ACC","CFA.SI":"NikkoAM-STC Asia REIT","BK4588":"碎股","LU1621767810.EUR":"AZ EQUITY GLOBAL INFRASTRUCTURE \"A\" (EUR) INC","LU0061474705.USD":"THREADNEEDLE (LUX) GLOBAL DYNAMIC REAL RETURN \"AU\" (USD) ACC","LU1621768206.USD":"AZ EQUITY GLOBAL INFRASTRUCTURE \"AAZ\" (USD) ACC","LU1066051498.USD":"HSBC GIF GLOBAL EQUITY VOLATILITY FOCUSED \"AM2\" (USD) INC","BK4084":"特种房地产投资信托","LU1621768115.EUR":"AZ EQUITY GLOBAL INFRASTRUCTURE \"B\" (EUR) INC","LU1267930573.SGD":"TEMPLETON GLOBAL \"AA\" (SGD) ACC A","BK7501":"新冠治疗股"},"translate_title":"塔时间到了","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"AMT.AU":1,"VZ":1,"TMUS":1,"T":1,"SBAC":1,"CCI":1,"AMT":1,"CFA.SI":0.9,"FAST":0.9},"content_text":"Communication has come a long way since the dawn of time, from limited means of visuals and sounds to the development of written language.Slow communication in the past led to battles being fought even after wars had been settled, such as the Battle of New Orleans in 1815.American Tower, Crown Castle, and SBA Communications are three leading cell tower REITs that offer stable cash flows and outsized total return prospects.   alengo/E+ via Getty Images How far communication has come since the dawn of time. Back in the beginning, people had very limited means of getting their points across. They could use visuals – if they were close enough to see – like hand gestures, body language, and facial expressions. Or they could use sounds – if they were close enough to hear – like words, grunts, and cries. The development of written language was therefore a major breakthrough, allowing people to communicate across greater distances. Only problem was… It could take days, weeks, or even months for a messenger to get one’s letter to the other side. The greater the distance and rougher the landscape, the longer it took. And that’s to say nothing about weather, hoodlums, or other delays and disasters. Really, there was no actual guarantee a letter would get through at all. (Admittedly, this sounds very much like the U.S. Postal Service in some towns and cities these days. But that’s another story altogether.) This better-than-nothing system is why there have been whole battles fought after wars had been settled. Take the Battle of New Orleans in January 1815 between the British and their former colonies. The former had been violating the latter’s maritime rights. The latter had been messing up almost everything else imaginable back on land. Yet, the conflicting parties managed to come to an agreement in Europe on December 24, 1814. If only either military force across the ocean knew about it. The Battle That Didn’t Need to Be To quote Britannica, the Battle of New Orleans was “the final major battle of” the War of 1812.  “Both the British and American troops were unaware of the peace treaty that had been signed between the two countries in Ghent, Belgium, a few weeks prior…. “In the Autumn of 1814, a British fleet of more than 50 ships commanded by Gen. Edward Pakenham sailed into the Gulf of Mexico and prepared to attack New Orleans, strategically located at the Mouth of the Mississippi River. The British hoped to seize New Orleans in an effort to expand into territory acquired by the United States through the Louisiana Purchase of 1803. On December 1, 1814, Gen. Andrew Jackson, commander of the Seventh Military District, hastened to the defense of the city.”  You can read the rest of the story right here. Or there are entire books written on the subject with so many details to delve into. I’ll just note here that: “The battle lasted about two hours. Despite being outnumbered, the Americans wounded approximately 2,000 British soldiers while suffering less than 65 casualties of their own.” That’s phenomenal on the American side. Yet, think about the men – on both sides – who did suffer and die across the battlefield. Think about all the resources that were wasted. The time. The effort. The emotions. All because communication was slow. Today, of course, we don’t have that problem. If anything, we have the opposite issue, where messages travel at top speeds. Far too often, it leads to minor or major miscommunications, and plenty of conclusions jumped. I guess it just goes to show that you can’t have it all. All the same, I think I prefer the modern hassles. Waiting weeks or more to get a message through just isn’t my cup of tea. A Dividend-Paying Way to Play Modern Communication My guess is you appreciate the marvels of modern technology too. In which case, it’s important to acknowledge the companies that facilitate it. I’m speaking of telecommunications businesses like:  AT&T (T) Verizon (VZ) Sprint (being bought by T-Mobile) T-Mobile (TMUS)  If you live in Europe, you might use Deutsche Telekom, Vodafone, or Orange. Asian examples include SingTel, Jio, Bharti Airtel, and Converge. Airtel, Orange, and Vodafone also operate in Africa, as do Telecom Egypt and Etisalat. And in South America, the list includes IG Networks and Compucima S.A., to name a few. I can’t speak for other continents, countries, and telecom companies. But here in the U.S. – despite how much we rely on (and even take for granted) their services – just the mention of the top four mobile providers might spark some snark. At least, AT&T and Verizon can drive customers crazy trying to get bills and other bothers sorted out. Trying to get through to them, then making them understand what the issue is, then actually getting a suitable resolution to said issue… Well, let’s just say it’s enough to turn even the most mild-mannered individual into a raging lunatic. Far less controversial are these companies’ structural providers: cell tower real estate investment trusts, or REITs. They might not provide the actual technology that transfers speech, texts, and code from point A to Point B. But they elevate that technology high into the air, allowing it to be effective. You simply wouldn’t be able to place your mobile Starbucks order, check your stock portfolio online, or call up your spouse on your smartphones without the structures cell tower REITs maintain. These companies provide critical infrastructure. They make money in doing so. They don’t tend to get on customers’ nerves. And, as icing on the communications cake, they pay out dividends to their investors along the way. American Tower (AMT) AMT is one of the largest publicly traded real estate investment trusts (“REITs”) with a market cap of approximately $80.3 billion and a portfolio of 224,502 communication sites. The cell tower REIT specializes in the development and operation of multitenant communications real estate and leases space on its communication sites to mobile network operators, broadcasters, municipalities, and government agencies. Since the company’s formation, it has grown its communications portfolio through site development, acquisitions, and long-term lease arrangements. Its portfolio is primarily made up of cell towers that AMT either owns or operates, as well as distributed antenna system (“DAS”) networks. AMT also manages rooftop and tower sites for 3rd party owners and has a portfolio of data centers which are leased to cloud providers, network operators, and various other enterprises across the United States. In total, AMT has more than 224,000 communication assets located across 25 countries that include:  42,905 communication sites in the United States and Canada 77,647 sites in Asia-Pacific 24,229 sites in Africa 31,241 sites in Europe, and 48,480 sites in Latin America  In addition to its property operations, the company provides tower-related services in the U.S. which include site application, structural analyses, zoning and permitting, and construction management.   AMT - IR The company’s portfolio is geographically diversified across the globe, which reduces its exposure to any single market. AMT received 47.41% of its 2023 property revenue from its U.S. and Canada tower segment, 16.34% from its Latin America segment, 10.45% from its Asia-Pacific segment, 11.14% from its Africa segment, 7.05% from its Europe segment, and almost 8% from its U.S. data centers.   AMT - (compiled by iREIT) American Tower’s tenants include some of the largest wireless carriers, internet service providers, and T.V. and radio broadcast companies in the world, such as AT&T, Verizon, T-Mobile, Dish Network, Bharti Airtel Limited, Telefónica S.A., and América Móvil. It has high tenant concentration with AT&T, T-Mobile, and Verizon accounting for 87% of its U.S. and Canada revenue. Internationally, its largest tenants are:  Bharti Airtel, Reliance Jio, and VIL which combined account for 88% of its Asia-Pacific revenue Airtel and MTN Group, which combined account for 84% of its Africa revenue Telefónica S.A. accounts for 73% of its Europe revenue, and América Móvil, AT&T, Telefónica, and TIM S.p.A. combined account for 75% of its Latin America revenue  While there is high tenant concentration, this factor is offset by the long-term, non-cancellable leases that AMT structures, which are typically for an initial term of 5-10 years and have multiple 5-year extension options. As seen in the lease renewal schedule below, approximately 60% of AMT’s leases are not set to renew until 2028 or after.   AMT - IR American Tower has been a growth machine over the past decade, with an average AFFO growth rate of 10.07% and an average dividend growth rate of 19.48% since 2014. In mid-March, AMT reduced its dividend of $1.70 per share to $1.62 per share and the company said it expects to maintain an annual dividend payout in 2024 that is relatively flat compared to that of 2023. The cell tower REIT posted positive AFFO growth in each year except for in 2019 and increased its dividend each year. Analysts expect continued growth, with AFFO projected to increase by 5% in 2024, and then by 7% and 8% in the years following.   FAST Graphs (compiled by iREIT) Technology and the infrastructure that supports it are here to stay (cell towers, data centers, logistics facilities). With AMT you get a conservative business model that generates revenues from long-term contracts that provide stable and predictable cash flows, while getting exposure to technology infrastructure that should continue to benefit from growing demand for wireless data and connectivity, as well as the expansion of 5G networks. The stock pays a 3.78% dividend yield that is well covered with a 2023 AFFO payout ratio of 65.35% and is currently trading at a P/AFFO of 17.21x, compared to its 10-year average AFFO multiple of 22.70x. We rate American Tower a Strong Buy.   FAST Graphs Crown Castle (CCI) CCI is a cell tower REIT with a market cap of approximately $40.7 billion and a portfolio of shared communications infrastructure located in every major market across the United States. Unlike the previous cell tower REIT, Crown Castle operates exclusively in the United States and is the country's largest supplier of shared communications infrastructure. CCI believes its exclusive focus on the U.S. creates an attractive total return opportunity with a lower risk profile and relies on the stability and growth of the U.S. wireless market rather than international diversification and exposure to emerging markets. Crown Castle’s infrastructure portfolio consists of:  Over 40,000 cell towers Roughly 115,000 small cell nodes, and Around 90,000 route miles of fiber  In addition to the company’s core business of leasing space on its communication infrastructure, it provides “site development services” that include site development, equipment installations, architectural, engineering, and zoning and permitting.   CCI - IR Crown Castle leases space on its towers to leading wireless carriers such as AT&T, T-Mobile, and Verizon, as well as broadband providers, and other companies under long-term contracts. The company’s largest tenants are T-Mobile, Verizon, and AT&T which together made up roughly 75% of CCI’s 2023 site rental revenues.   CCI - IR While CCI has high tenant concentration, its rental revenues are derived from long-term leases that have a W.A. remaining life of ~6 years and are expected to generate $39.0 billion of future cash flows.   CCI - IR Cell towers have a built-in advantage compared to many other property types, since new tenants can be added with very little incremental cost. Once the tower structure is in place, CCI can increase its site revenue and profitability as it adds additional tenants. While in some cases modifications may be needed, almost all of CCI’s towers can accommodate additional tenancy. For a tower structure, the company projects an initial asset yield (1 tenant) ranging between 3-4%. The expected asset yield increases to the high single digits with 2 tenants and to the mid-teens with 3 tenants. At the end of 2023, CCI had an average of 2.5 tenants per tower.   CCI - IR Since 2015, the company has had an average AFFO growth rate of 4.28% and an average dividend growth rate of 8.18%. Additionally, over this time period, the company has achieved positive AFFO per share growth and increased its dividend each year. Analysts expect AFFO per share to fall by -8% in 2024 and by -2% in 2025, but then to return to growth in 2026 with an estimated 2% increase in AFFO per share.   FAST Graphs (compiled by iREIT) More recently, Crown Castle has been under pressure from its co-founder Ted B. Miller, who named Steven J. Moskowitz as president and CEO, effective April 11. Moskowitz held several executive leadership roles during his 12 years at American Tower (AMT), including 7 years as executive vice president and president of its U.S. Tower business. Crown Castle’s board and management team are laser focused on completing the strategic and operating review of the fiber business. As Dane Bowler pointed out, \"TMUS bought Sprint, the combined company no longer needed to rent each tower twice. So they are letting Sprint leases lapse when they expire. 4X revenue towers went to 3X revenue towers. It is a substantial hit, and CCI’s earnings have legitimately fallen as a result.\" We suspect the small cell business will be monetized, so Crown Castle can focus on its core tower portfolio. Crown Castle’s portfolio allows it to provide a range of communication solutions and stands to benefit from the increasing demand for data and connectivity. Its communication assets should play a vital role in the proliferation of emerging technologies such as 5G and smart cities, and should continue to facilitate the transmission of data for the foreseeable future. The stock pays a 6.66% dividend yield that is covered with a 2023 AFFO payout ratio of 82.91% and is currently trading at a P/AFFO of 12.76x, compared to its average AFFO multiple of 20.85x. We rate Crown Castle a Strong Buy.   FAST Graphs SBA Communications (SBAC) SBAC is a cell tower REIT with a market cap of approximately $21.2 billion and a portfolio of wireless communications infrastructure that includes cell towers, rooftops, and other structures that facilitate wireless communications. The company’s primary operations are in the United States, but it has a global presence as well with towers in Central America, South America, Tanzania, the Philippines, Canada, and South Africa. The cell tower REIT’s primary business segment is its site leasing business, which made up 97.4% of its total segment operating profit in 2023. Through this segment, SBAC leases antenna space on its towers to wireless carriers and other businesses and manages rooftop and other communications sites for 3rd party property owners. The company’s secondary business line is its site development business, in which it provides assistance to wireless service providers for the development and maintenance of their own communications assets. As of its most recent update, the company’s portfolio includes 39,618 total communications sites with 17,487 domestic sites and 22,131 international sites.   SBAC - IR SBAC leases its antenna space to wireless service providers such as Verizon, AT&T, and T-Mobile who use the communications sites to enable the transmission of voice and data signals. Like the previous two companies, SBAC has high tenant concentration. T-Mobile, AT&T, and Verizon combined made up 66.6% of the company’s total revenue in 2023. The company’s largest tenant is T-Mobile which made up 32.5% of its 2023 revenue, followed by AT&T and Verizon which made up 19.5% and 14.6%, respectively. While there is high tenant concentration, SBAC generates its revenues from long-term leases that generally have high renewal rates and steady cash flows. While the majority of SBAC’s revenue comes from its largest 3 tenants, it also provides services or leases space to smaller carriers including Airtel Tanzania, Liberty Technologies, Telefonica, U.S. Cellular, and Vodacom.   SBAC - IR SBAC was incorporated in Florida in 1997, but the company did not convert into a REIT until the end of 2016 and did not pay a dividend until 2019. Since 2019, the company has delivered an average AFFO growth rate of 7.72%, and since 2021, the company has had an average dividend growth rate of 22.29%. Analysts expect modest growth over the next several years, with AFFO per share expected to increase by 2% in 2024, and then by 1% and 2% in the years 2025 and 2026, respectively. As seen in the chart below, there is a lot of space between the annual AFFO and the dividend totals. Or put another way, the company pays out a small portion of its cash flow which goes a long way in protecting its dividend. In 2023, the company generated AFFO of $13.08 and paid a dividend of $3.40 per share, giving the company a 2023 AFFO payout ratio of only 25.99%.   FAST Graphs (compiled by iREIT) Like the other cell tower REITs, SBAC is poised to benefit from the increasing demand for wireless connectivity and the development of new technologies such as 5G. While there is plenty of uncertainty in the technology sector (and the future in general), cell towers are a conservative way to invest in technology infrastructure due to the long-term nature of the leases in place as well as mission-critical nature of its communication assets. The stock pays a 2.00% dividend yield and trades at a P/AFFO of 14.90x, compared to its normal AFFO multiple of 26.61%. We rate SBA Communications a Strong Buy.   FAST Graphs DATA DUEL (I hope you're enjoying our new \"data duel\" feature. Let us know your feedback, please. Thank you)   iREIT®  iREIT®  iREIT®  iREIT®  iREIT®  iREIT®  IRET Weighting for Towers:    IRETETF.com","kind":null,"is_publish_news":null,"is_publish_highlight":null,"is_publish_live":null,"is_publish_wemedia":null,"editions":null,"symbols":[],"gpt_button":1},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"deviceId":"web-server-community-laohu8-v3","version":"4.22.4","shortVersion":"4.22.4","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2429594119"}