For the companies that own cellphone towers, business has been brisk. American Tower Corp. (NYSE: AMT), SBA Communications Corp. (Nasdaq: SBAC) and Crown Castle International Corp. (NYSE: CCI) have generated 17%-to-22% compound annual sales growth over the past five years. The business model is fairly simple. Each cell tower can handle equipment and traffic for as many as four or five telecom carriers and transmit a signal anywhere from 22 to 45 miles. Leases of ten years and annual rent increases of around 3% mean the towers are great cash flow machines. #-ad_banner-#As telecom carriers race to compete and… Read More
For the companies that own cellphone towers, business has been brisk. American Tower Corp. (NYSE: AMT), SBA Communications Corp. (Nasdaq: SBAC) and Crown Castle International Corp. (NYSE: CCI) have generated 17%-to-22% compound annual sales growth over the past five years. The business model is fairly simple. Each cell tower can handle equipment and traffic for as many as four or five telecom carriers and transmit a signal anywhere from 22 to 45 miles. Leases of ten years and annual rent increases of around 3% mean the towers are great cash flow machines. #-ad_banner-#As telecom carriers race to compete and raise money selling off their tower infrastructure, they’re finding eager buyers in the tower operators. Verizon Communications, Inc. (NYSE: VZ) announced a long-term lease and sale of 11,500 towers, one of the last remaining large carrier portfolios, to American Tower in February for $5.06 billion. Since cash flows are all but certain, debt is easy to come by and tower operators are loading up to make capital investments for years to come. American Tower has more than two-thirds of its capital structure (68%) in debt and a BBB credit rating by Morningstar, just one level above non-investment grade. Crown Castle… Read More