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Uniti Group: REIT Targets Mission Critical Communications

10/01/2018 5:00 am EST

Focus: REITS

Bryan Perry

Editor, Cash Machine, Premium Income, Quick Income Trader, Instant Income Trader

Demand for broadband capacity is driving explosive growth in telecommunications, fueled by new technologies capable of delivering the bandwidth and speeds to support ever-increasing Internet and mobile traffic, observes Bryan Perry, income expert and editor of Cash Machine.

This scenario makes network assets extremely valuable to operators and investors alike. Uniti Group (UNIT) is an internally managed real estate investment trust engaged in the acquisition and construction of mission-critical communications infrastructure.

The REIT is a leading provider of wireless infrastructure solutions for the communications industry. Uniti owns 5.4 million fiber strand miles, approximately 770 wireless towers and other communications real estate throughout the United States and Latin America.

In my effort to find high-yield assets that operate in growing markets with an emphasis on domestic operations, the telecommunications infrastructure industry offers investors some very attractive opportunities.

We’ve made excellent returns in leading cell tower companies over the years, and today I want to add a well-positioned name within the sector that pays an outstanding dividend yield of 12.0%.

Second-quarter results were solid, with the company reporting revenues of $247.3 million and Adjusted Funds From Operations (AFFO) of $0.62 per share. Fiber lines contributed $67.4 million, towers owned contributed $2.5 million and leasing of infrastructure to service providers had revenues of $173.9 million.

UNIT is set to earn AFFO of $2.52 per share for 2018, which more than covers the $2.40 per share dividend payout the company is committed to. UNIT declared a $0.60 quarterly dividend that is set to trade ex-dividend on Sep. 27. Buy Uniti Group under $21.

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