SBA Communications Corp's Dividend Analysis
Insight into SBA Communications Corp's Upcoming Dividend and Financial Health
SBA Communications Corp (NASDAQ:SBAC) recently announced a dividend of $0.85 per share, payable on 2023-12-14, with the ex-dividend date set for 2023-11-15. 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 SBA Communications Corp's dividend performance and assess its sustainability.
What Does SBA Communications Corp Do?
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SBA Communications owns and operates almost 40,000 cell towers throughout North America, South America, and Africa. It leases space on its towers to wireless service providers, who install equipment on the towers to support their wireless networks. The company has a very concentrated customer base, with most revenue in each market being generated by just the top few mobile carriers. The company owns more than 17,000 towers in the U.S., which accounted for about three fourths of the company's total revenue in 2022. Internationally, SBA's greatest presence is in Brazil, where it operates roughly 10,000 towers. SBA operates as a real estate investment trust, or REIT.
A Glimpse at SBA Communications Corp's Dividend History
SBA Communications Corp has maintained a consistent dividend payment record since 2019, with dividends currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down SBA Communications Corp's Dividend Yield and Growth
As of today, SBA Communications Corp currently has a 12-month trailing dividend yield of 1.49% and a 12-month forward dividend yield of 1.55%. This suggests an expectation of increased dividend payments over the next 12 months. Over the past three years, SBA Communications Corp's annual dividend growth rate was 56.60%. Based on SBA Communications Corp's dividend yield and five-year growth rate, the 5-year yield on cost of SBA Communications Corp stock as of today is approximately 1.49%.
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, SBA Communications Corp's dividend payout ratio is 0.72, which may suggest that the company's dividend may not be sustainable.
SBA Communications Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks SBA Communications Corp's profitability 9 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported net profit in 7 years out of the past 10 years.
Growth Metrics: The Future Outlook
To ensure the sustainability of dividends, a company must have robust growth metrics. SBA Communications Corp'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 SBA Communications Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. SBA Communications Corp's revenue has increased by approximately 11.10% per year on average, a rate that outperforms approximately 84.41% 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, SBA Communications Corp's earnings increased by approximately 43.60% per year on average, a rate that outperforms approximately 88.19% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 32.30%, which outperforms approximately 91.64% of global competitors.
Engaging Conclusion: Evaluating SBA Communications Corp's Dividend Prospects
In conclusion, while the recent announcement of SBA Communications Corp's dividend is a positive signal for investors, a closer look at the company's financial health indicates both strengths and potential concerns. The robust dividend growth rate and favorable growth metrics suggest that SBA Communications Corp is on a solid path. However, the payout ratio warrants careful monitoring as it may imply challenges in maintaining dividend sustainability without affecting future growth. Investors should weigh these factors, alongside the company's strong profitability and growth ranks, to make informed decisions about their investment in SBA Communications Corp. GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener to find similar investment opportunities.
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.
