American Tower: Priced Perfectly For Upside

In a recent article I published on my Marketplace service, I highlighted the appeal of American Tower (AMT) because of its ability to leverage the robust capital expenditures still being deployed to 4G by major carriers, the diversification offered by its international presence, and its methodical return of cash to shareholders in the form of buybacks and dividends.

Focus on 4G and lower frequency capex

The recent 600MHz auction resulting in $19.6 billion in proceeds is a clear indication that carriers are still focusing on building out their current 4G capacity. The lower bandwidth spectrum is typically used for sending signals over longer distances and through walls and windows, which is more likely to benefit tower owners and macro cell providers such as AMT. Meanwhile, even with the launch of 5G in a few years, the lifecycle of each network typically lasts 10 years so we still have 4-5 years of runway with 4G.

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