American Tower Corporation Boosted Its Dividend 23 Consecutive Quarters (AMT)
By: Ned Piplovic,
American Tower Corporation boosted its quarterly dividend payout every quarter since it started paying dividends in April 2012.
The company’s current dividend yields 2% and the share price rose more than one third over the current trailing 12-month period to reward shareholders with a total return over that period in excess of 40%. The company has its next ex-dividend date on December 27, 2017, with the pay date scheduled for the middle of next month, on January 16, 2018.
American Tower Corp. (NYSE:AMT)
Founded in 1995 and headquartered in Boston, Massachusetts, the American Tower Corporation is a real estate investment trust (REIT). The company 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. In 2016, the company made a major expansion by acquiring a 51% controlling ownership interest in Viom Networks Limited, along with Viom’s local network of more than 42,000 communications sites in India. This acquisition increased the company’s assets by almost 40% to nearly 150,000 communications sites. In 2017, the company made its first appearance on the Fortune 500 list. In addition to multiple locations in the United States, the company has offices in Argentina, Brazil, Chile, Columbia, Costa Rica, France, Germany, Ghana, India, Mexico, Nigeria, Paraguay, Peru, South Africa and Uganda.
The company’s most recent quarterly dividend hike was 6.1% from the previous period’s $0.66 to the current $0.70 payout. This current quarterly distribution is equivalent to a $2.80 annual payout and yields 2%. The company has raised its quarterly dividend every quarter since it started paying dividends in April 2012. Since that first dividend distribution of $0.21, the REIT grew its dividend distribution at an average rate of 5.4% per quarter – or 22.2% per year. After compounding at the 5.4% average quarterly growth rate for 23 consecutive quarters, the current quarterly dividend payout is 233% higher than it was six years ago.
Despite the high growth rate, the current 2% yield is somewhat suppressed by a significant increase in the company’s share price. However, when compared to American Tower’s own 1.6% five-year average yield, the current yield is almost 22% higher. Additionally, the current yield is 17.5% above the 1.66% average yield of American Tower’s peers in the Diversified Communications Services segment and 59% higher than the 1.23% average yield in the entire Technology sector, which is known for reinvesting most of its earnings into research and technology development rather than dividend distributions.
The company’s share price traded sideways between $103 and $106 from December 13, 2016, to February 7, 2017. During this period, the share price dropped to its 52-week low of $103.45. After that period of sideways movement, the share price rose 43% and reached $148.05 on August 31, 2017. Following a 6.1% drop over the following 30 days, the share price reversed trend and grew 13.3% to reach its new all-time high of $152.72 on November 8, 2017. After the November peak, the share price declined 6% and closed on December 12, 2017, at $143.51, which was 35.2% higher than it was 12 months ago, 38.7% higher than the January price low and 87% higher than it was five years ago.
The growing dividend and the substantial capital growth combined to offer American Tower’s investors a total return of 43.1% in the past 12 months, a total return of 51% over the last three years and a total return of nearly 104% over the last five years.
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