With more than 180,000 tower sites across the world, American Tower Corporation (AMT) will be one of the most important players of the 5G ramp-up, notes Mike Cintolo, editor of Cabot Top Ten Trader.
5G is expected to be a game-changer, exponentially increasing wireless usage as speeds improve and increased connection possibilities allow for new applications, including autonomous vehicles and drones.
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As for the effect on business, American Tower’s CEO recently remarked that 5G will require cell towers be closer together, which will obviously represent a big building opportunity for AMT.
Of course, bigger picture, the general rise in mobile device usage is driving growth; American adults spend about three and a half hours daily browsing the internet on their phones, a statistic that is expected to rise to four hours by next year.
About 88% of AMT’s customer base is the large wireless providers (AT&T, Verizon Wireless, Sprint and T-Mobile), and the recently approved Sprint and T-Mobile merger — which had stymied mobile tower growth for a while — is anticipated to supercharge T-Mobile’s 5G deployment and position Dish as a possible fourth carrier, which should also boost tower build-outs.
The company’s growth hit a hiccup in Q4, but funds from operations (the preferred profit measure for REITs like American Tower) are expected to continue their trend of slow, steady reliable growth. The dividend is relatively modest for a REIT (1.7%) but is raised most every quarter.
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Technically, AMT had a big run from late 2018 ($150 or so) to its peak earlier this year (near $260) before going over the falls with the market, dropping as low as $175.
But it immediately spiked about halfway back, and last week it motored all the way to new highs on heavy volume! As we’ve written many times, new highs usually bring out the sellers in a down market, so if you’re game, aim to grab a few shares on weakness.
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