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For most investors, how much a stock's price changes over time is important. This factor can impact your investment portfolio as well as help you compare investment results across sectors and industries.
FOMO, or the fear of missing out, also plays a role in investing, particularly with tech giants and popular consumer-facing stocks.
What if you'd invested in American Tower (AMT) ten years ago? It may not have been easy to hold on to AMT for all that time, but if you did, how much would your investment be worth today?
American Tower's Business In-Depth
With that in mind, let's take a look at American Tower's main business drivers.
Boston, MA-based American Tower Corporation is a leading independent operator of wireless communications towers. The company leases space on its communication sites to tenants and offers a range of tower-related services. It became a real estate investment trust (REIT) on Jan 1, 2012.
As of Mar 31, 2021, its portfolio included approximately 43,000 towers in the United States and Canada, and 144,000 internationally. Moreover, American Tower had around 1,800 distributed antenna systems (DAS) in its U.S. and international markets.
The company’s major U.S. customers include AT&T, T-Mobile and Verizon Wireless. T-Mobile and Sprint completed the merger on Apr 1, 2020, creating the New T-Mobile.
In December 2020, American Tower added approximately 3,000 communications sites to its portfolio with the acquisition of InSite Wireless Group, LLC, for $3.5 billion including debt. The transaction marked American Tower’s entry in Canada and Australia, and also enabled it fortify presence in the United States. Consequently, it updated reportable segments, renaming the U.S. property segment to the U.S. & Canada property segment and the Asia property segment to the Asia-Pacific property segment.
American Tower reports under the Property segment (around 99% of total revenues in first-quarter 2021) and the Service segment (1%). The property segment includes the following regional segments: (i) The United States and Canada, (ii) the Asia Pacific, (iii) Africa, (iv) Europe and (v) Latin America.
The service segment offers tower-related services in the United States, including site acquisition, zoning and permitting, and structural analysis services, which primarily support the company’s site-leasing business, including the addition of new tenants and equipment at sites.
Note: All EPS numbers presented in this report represent funds from operations (“FFO”) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.
While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in American Tower ten years ago, you're probably feeling pretty good about your investment today.
A $1000 investment made in June 2011 would be worth $5,297.61, or a gain of 429.76%, as of June 21, 2021, according to our calculations. This return excludes dividends but includes price appreciation.
The S&P 500 rose 227.68% and the price of gold increased 9.40% over the same time frame in comparison.
Going forward, analysts are expecting more upside for AMT.
American Tower closed the first tranche of its proposed Telxius Towers buyout for €6.2 billion, which included roughly 20,000 communications sites in Germany and Spain. Also, it closed the Latin American tranche for €0.9 billion, comprising more than 7,000 communications sites in Brazil, Peru, Chile and Argentina. The company’s extensive and geographically-diversified communication real estate portfolio is well poised to benefit from increasing capital spending by wireless carriers in 5G deployments and future deployment of additional spectrum. Decent liquidity and prudent capital allocations bode well. Its shares have outperformed the industry over the past three months. However, the company expects churn rate in its U.S. & Canada property segment to be elevated for several years, affecting overall organic tenant billing growth.
Over the past four weeks, shares have rallied 6.40%, and there have been 7 higher earnings estimate revisions in the past two months for fiscal 2021 compared to none lower. The consensus estimate has moved up as well.
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American Tower Corporation (AMT) : Free Stock Analysis Report
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