American Tower: Broadcasting Buy for Income

06/19/2018 5:00 am EST

Focus: REITS

Ned Piplovic

Assistant Editor, Eagle Financial Publications

American Tower Corporation (AMT) is a REIT that leases space on multi-tenant communications sites to wireless service providers, radio and television broadcast companies, wireless and landline data providers, government agencies and municipalities, as well as tenants in other industries, explains Ned Piplovic, income expert and editor of DividendInvestor.

The American Tower Corporation has raised its quarterly dividend every quarter since it started paying dividends in April 2012. Over the past six years, the REIT has increased its annual dividend distribution amount more than 250%, which corresponds to an average growth rate of 22.8% per year — or 6.7% each quarter.

While the share price growth fell below its long-term level, the company’s share price still showed growth and combined with the dividend boosts rewarded AMT’s shareholders with an 8.4% total return over the past 12 months. The higher share price growth rates over the longer term rewarded long-term investors with a 56% total return over the past three years and a 96% total return over the past five years.

The company’s current dividend yields 2.2% and that yield outperforms average industry yields by significant margins.

In addition to the steadily rising dividend income, the American Tower Corporation has provided its shareholders with stable asset appreciation for more than 15 years. While the share price advanced more than 80% over the past five years, the growth has slowed slightly over the past 12 months.

However, if the share price resumes its long-term growth rate, the current growth slowdown could be an opportunity for interested investors to take a long position prior to the company’s next ex-dividend date on June 18, 2018. That move would ensure eligibility to receive a dividend distribution on the company’s next pay date, which will occur on July 13, 2018.

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