Wireless Tower REITs

What do you think of wireless tower REITs here? AMT, CCI, SBAC - they’ve underperformed other REITs. They’ve historically been very defensive given upgrade cycles in the wireless space: 3G → 4G → 5G

https://viz.wiijii.co/chart/?id=yZQ0AQxFh0iU0LrRarq2

I’m new to this board, @mjstocktalker. so apologies for the late (!) reply.

I own both AMT and CCI because I expect them to continue to grow their dividends over time. I don’t know SBAC but all 3 stocks are down in the past year (AMT > SBAC > CCI).

CCI is paying a much larger dividend than AMT (5.36% vs 3.19%). OTOH, CCI has said that they don’t expect to meet their target for 7-8% div growth over the next couple years as they adapt to the repercussions from the T-Mobile/Sprint merger (basically they lost a big customer).

CCI tends to be more heavily focused on North America, where AMT has a more global footprint. I’ve heard the claim that North American networks are upgrading to 5G faster, which ought to be a tailwind for both companies. I’m unclear whether that’s true or not; in past network upgrades, North American operators have lagged.

Both companies are disadvantaged by the rapid rise in interest rates, both because they can’t compete with a higher, less risky return in a money market fund; and in the case of AMT, with 22% of their debt as floating debt, increased costs drive down returns.

In hindsight, I should have sold them both back when the Fed was threatening to raise rates, but I figured they would be able to adapt. So far, both management teams have been no more nimble than I’ve been – and at this point, I think the effects of higher interest rates are priced in.

Longterm, I think both businesses are good businesses, with strong tailwinds supporting future growth. How many people do you know who are less attached to their phone this year than they were 5 years ago? I expect they will make up lost ground, and will continue to pay an attractive dividend.

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