2024-02-07 12:20:07 ET
Summary
- To generate significant cash flows, American Tower needs to squeeze more money out of its Tower Assets, but the trend shows that the opposite is happening.
- Also, mobile data growth remains a key factor driving the need for digital infrastructure, but the amount being spent by customers, in this case wireless carriers, should also be considered.
- From both these two perspectives, it is not worthwhile to invest.
- However, both cost control and debt reduction are positives at times of uncertainty.
- Thus, I have a hold position for AMT which pays above 3.5% dividend yields, but, as a rate-sensitive stock, it can suffer from volatility in case Mr. Powell sounds too hawkish.
REITs or Real Estate Investment Trusts have historically been resilient in navigating periods of uncertainty as they tend to generate steady cash flows. Also, according to some researchers, it is the S&P real estate sector that has proved to be the real winner compared to other market averages since October last year with American Tower ( AMT ) closely following as shown in the orange chart below....
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For further details see:
American Tower: Telco Spending Issue And Rate-Sensitivity Risks