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Given a portfolio of more than 149,000 communication sites worldwide and the unmatched geographic diversification of its sites, American Tower Corporation AMT is strategically positioned to capture incremental demand from global 5G deployment efforts, growing wireless penetration and spectrum auctions. Its data center segment is poised to gain due to industry-wide strong demand. Moreover, a decent financial position supports its growth endeavors.
However, customer concentration and consolidation are a concern in the wireless industry and are likely to weigh on top-line growth.
What’s Aiding AMT?
American Tower has a solid track record of delivering healthy performance due to the robust demand for its global macro tower-oriented asset base. It has witnessed strong growth in key financial metrics while continuing to expand its platform. In the fourth quarter of 2024, the company recorded healthy year-over-year organic tenant billings growth of 5% and total tenant billings growth of 5.7%. Amid secular growth trends in the wireless industry, the healthy performance is expected to continue in 2025 and beyond.
With the growth in cloud computing, Internet of Things and Big Data, and an increasing number of companies opting for third-party IT infrastructure, data-center companies are experiencing a boom in the market. Also, the estimated growth rates for the Artificial Intelligence (AI), autonomous vehicle and virtual/augmented reality markets will remain robust over the coming years. In the fourth quarter of 2024, the company attained data center revenue growth of 9.7%. The company plans to invest more than $600 million in expanding its data center footprint in 2025.
Apart from having a robust operating platform, American Tower has ample liquidity to support its debt servicing. Its consistent adjusted EBITDA margins, revenue growth and favorable return on invested capital indicate strength in its underlying core business and support its ability to manage its near-term obligations. As of Dec. 31, 2024, AMT had $12 billion in total liquidity. The company's net leverage ratio as of Dec. 31, 2024 was 5.1. With a weighted average remaining term of debt of 5.7 years, it has decent financial flexibility.
American Tower has a disciplined capital distribution strategy and remains committed to increasing shareholder value through regular dividend hikes. In the last five years, American Tower has increased its dividend 16 times, and the annualized dividend growth rate for this period is 10.46%. Moreover, it has a lower dividend payout compared with its industry. Such disbursements highlight its operational strength and commitment to rewarding shareholders handsomely. Check American Tower’s dividend history here.