2024-03-13 05:51:44 ET
Summary
- Uniti Group owns valuable fiber assets but struggles with high leverage and debt servicing costs.
- Two pathways for UNIT stock to overcome its debt burden: lease-up of existing fiber capacity and sale of assets or the company.
- The demand for fiber is increasing due to 5G and AI, creating opportunities for the Company to generate more cash flow and potentially improve its financial situation.
Uniti Group ( UNIT ) owns about 140,000 route miles of fiber, strategically located in high population and job growth MSAs of the southeast. This fiber is broadly known to be a valuable asset, but Uniti as a company has long struggled with its high leverage, which is becoming increasingly expensive to service in the new interest rate environment. Recent developments, however, provide Uniti with 2 pathways in which to overcome its debt burden, and each has the potential to be quite lucrative for shareholders.
2 Pathways For Uniti To Reward Shareholders
- Increased cash flow through lease-up, allowing more comfortable servicing of debt + dividend.
- Outright sale of the company or its assets
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Uniti Group: Fiber Demand Facilitates Leasing Or Sale