American Tower Corporation Offers Shareholders 25th Consecutive Quarterly Dividend Boosts (AMT)
By: Ned Piplovic,
The American Tower Corporation continues its streak of dividend boosts with the 25th consecutive increase to its quarterly dividend.
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.
American Tower Corporation (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 share price experienced volatility over the past 12 months that was slightly higher than it was over the past five years. The share price reached its 52-week low of $129.18 on June 12, 2017. However, after bottoming out during the first week of the trailing 12-month period, the share price reversed trend and ascended more than 18% before reaching its 52-week high of $152.72 on November 8, 2017.
After the November peak and influenced by several overall market selloffs, the share price volatility become more pronounced. Through several up-and-down cycles, the share price declined 8.3% since the November peak and closed on June 5, 2018, at $140.06. However, that closing price was still 6.3% higher than it was one year earlier, 8.4% above the 52-week low from June 2017 and 81% higher than it was five years ago.
The company offered its shareholders a 2.7% dividend boost from the previous period’s $0.75 payout to the current $0.77 quarterly dividend distribution. This current quarterly distribution corresponds to a $3.08 annual payout and a 2.2% forward yields. While low in comparison to average yields in some other sectors, AMT’s current yield is nearly 30% above the company’s own 1.7% average yield over the past five years, as well as more than double the 1.08% simple average yield of the overall Technology sector. While the 1.7% average yield of the Diversified Communication Services segment is considerably higher than the Technology sector’s 1.08% average yield, AMT’s current 2.2% dividend yield is still nearly 30% above the Diversified Communication Services segment’s average yield.
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.
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Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.