Is American Tower a buy?

It’s time to breakdown a 5G name! Here is the breakdown on $AMT, otherwise known as American Tower Corporation.


Current Price: $227.14

52/Wk High: $272.20

52/Wk Low: $174.32


Market Cap: $100.8 billion

Dividend: $4.84 / 2.14% Yield


Read below for the breakdown!


American Tower is a major real estate investment trust in which owns and operates the most communication towers in the world.


Given the 5G boom and the expected 5G growth cycle, American Tower has seen significant growth, therefore growing their dividend as well.


American Tower Corporation provides wireless communications to five continents, twenty countries, and maintains over 5,500 employees.


Not only is American Tower the leader in their industry but the company continues to expand, recently signing an agreement to acquire InSite Wireless Group for $3.5 billion.


The InSite acquisition will add roughly 3,000 more communications sites overall, with 1,500 towers in the US and 200 in Canada.


“This transaction augments our foundational U.S. business through the addition of a well-run, high-quality, complimentary, macro-tower focused portfolio, while also marking our entry into Canada,” CEO Tom Barlett said in reference to the InSite deal.

Digging into the numbers American Tower missed expectations in Q3, reporting an EPS of $1.04 versus the EPS analysts consensus estimate of $1.10.


On the bright side, $AMT reported revenues of $2.013 billion in Q3, representing a 3% increase in revenue. Not only that but property revenue also continued to increase by 3.4% to $1.988 billion.


Rounding out the report, $AMT reported an unfortunate decline in net income by 8.4%, bringing the Q3 net income to $463 million. Adjusted EBITDA on the otherhand improved by 5.6% to $1.298 billion.


For the full year, management reiterated guidance and expects 2020 property revenues to total $7.855 billion to $7.915 billion. Net income for 2020 is also expected to land within a range of $1.855 billion to $1.905 billion.


On a final note, the full-year adjusted EBITDA is expected to land between $5.075 billion to $5.125 billion in 2020.


Taking a look at the balance sheet the numbers are not bad.


Total Debt: $24.782 billion


Total Liabilities: $37.731 billion


Total Assets: $41.462 billion


Cash & Short Term Inv: $1.626 billion


Given the numbers, the valuation has held rather steady in recent months.


Price to Earnings: 55.70x


Price to Sales: 13.36x


Price to Book: 27.07x


Price to Cash Flow: 27.88x


Management has also done moderately well throughout the past few quarters and years.


Return on Equity: 42.09%


Return on Assets: 4.70%


Return on Invested Capital: 5.38%


Collecting the numbers the analysts are rather bullish on American Tower with the mean price target sitting at $288.29/share, representing a 26.82% gain.


American Tower’s high price target is $315.00/share, representing a 38.57% gain, while the low price target is $244.00/share, representing a 7.33% gain.


The big money is also quite involved with 90.15% of $AMT being owned by institutions. Top holders include The Vanguard Group, BlackRock Institutional Trust, and State Street Global Advisors.


On a technical basis, American Tower has been struggling. According to the six-month charts, the MACD has been trending sideways in recent months within a tight range of around -1.79.


The six-month charts are also indicating an RSI of 41.18 and CCI of -124.91, both of which are on the low end. It is also important to note that $AMT trades roughly 44 points off its highs.


In short, $AMT is an excellent way to cash in on the 5G boom in the long term all the while getting paid for holding it.


EAT - SLEEP - PROFIT


Disclaimer: This is not direct financial advice, simply an opinion based on independent research.