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How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.
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.
Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in American Tower a decade ago, you're probably feeling pretty good about your investment today.
According to our calculations, a $1000 investment made in July 2011 would be worth $5,377.87, or a 437.79% gain, as of July 15, 2021. Investors should keep in mind that this return excludes dividends but includes price appreciation.
The S&P 500 rose 234.20% and the price of gold increased 10.21% over the same time frame in comparison.
Analysts are anticipating more upside for AMT.
Shares of American Tower have outperformed the industry over the past six months. Also, the trend in estimate revisions for 2021 funds from operations (FFO) per share indicates a favorable outlook. The company has announced the sale of a 10% stake in ATC Europe to Allianz Capital Partners. It will likely use the capital from the divestiture for boosting the company’s European business. 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. 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.
The stock is up 5.57% over the past four weeks, and no earnings estimate has gone lower in the past two months, compared to 3 higher, for fiscal 2021. The consensus estimate has moved up as well.
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American Tower Corporation (AMT) : Free Stock Analysis Report
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