Crown Castle Inc's Dividend Analysis
Assessing the Sustainability of Crown Castle Inc's Upcoming Dividend
Crown Castle Inc (NYSE:CCI) recently announced a dividend of $1.57 per share, payable on 2023-12-29, with the ex-dividend date set for 2023-12-14. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Crown Castle Inc's dividend performance and assess its sustainability.
What Does Crown Castle Inc Do?
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Crown Castle International owns and leases roughly 40,000 cell towers in the United States. It also owns more than 85,000 route miles of fiber. It leases space on its towers to wireless service providers, which install equipment on the towers to support their wireless networks. The company's fiber is primarily leased by wireless service providers to set up small-cell network infrastructure and by enterprises for their internal connection needs. Crown Castle's towers and fiber are predominantly located in the largest U.S. cities. The company has a very concentrated customer base, with more than 70% of its revenue coming from the big three U.S. mobile carriers. Crown Castle operates as a real estate investment trust.
A Glimpse at Crown Castle Inc's Dividend History
Crown Castle Inc has maintained a consistent dividend payment record since 2014. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down Crown Castle Inc's Dividend Yield and Growth
As of today, Crown Castle Inc currently has a 12-month trailing dividend yield of 5.49% and a 12-month forward dividend yield of 5.49%. This suggests an expectation of same dividend payments over the next 12 months. Over the past three years, Crown Castle Inc's annual dividend growth rate was 9.30%. Extended to a five-year horizon, this rate decreased to 8.80% per year. Based on Crown Castle Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Crown Castle Inc stock as of today is approximately 8.37%.
The Sustainability Question: Payout Ratio and Profitability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Crown Castle Inc's dividend payout ratio is 1.75, which may suggest that the company's dividend may not be sustainable. Crown Castle Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Crown Castle Inc's profitability 9 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. Crown Castle Inc's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors. Revenue is the lifeblood of any company, and Crown Castle Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Crown Castle Inc's revenue has increased by approximately 5.30% per year on average, a rate that outperforms approximately 69.92% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Crown Castle Inc's earnings increased by approximately 28.30% per year on average, a rate that outperforms approximately 83.4% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 30.50%, which outperforms approximately 90.42% of global competitors.
Next Steps
In conclusion, while Crown Castle Inc's dividend payout ratio may raise some concerns about sustainability, the company's strong profitability and growth metrics present a compelling case for the future. With a solid growth rank and impressive revenue and EPS growth rates, Crown Castle Inc appears poised to maintain its dividend payments. However, investors should continue to monitor these factors to ensure that the dividends can be sustained over the long term. For those seeking high-dividend yield opportunities, GuruFocus Premium users can leverage the High Dividend Yield Screener to find similar investment prospects.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
