1. American Tower Corporation (NYSE:AMT)
Number of Hedge Fund Holders: 73
American Tower Corporation (NYSE:AMT) is an American real estate investment trust company that specializes in wireless and broadcast communications infrastructure in several countries. For Q3 2024, the company reported revenue of $2.52 billion, marking a 10.5% decline compared to the same period last year. During the quarter, a significant move for the company was the sale of its underperforming tower operations in India to Brookfield Infrastructure. This deal allowed Brookfield to strengthen its position in the Indian market, increasing its tower portfolio from 175,000 to 253,000 towers and expanding its customer base. Brookfield acquired these assets at an attractive price, as American Tower had faced profitability challenges with the portfolio due to tenant-related issues.
The difficulties faced by American Tower Corporation (NYSE:AMT) are overshadowing the strong and steady demand for communications and data infrastructure. However, as these challenges are expected to ease, the REIT has the potential for substantial growth starting in 2025 and continuing thereafter.
That said, Mar Vista Investment Partners, LLC highlighted the strengths of American Tower Corporation (NYSE:AMT)’s business in its Q3 2024 investor letter:
“American Tower Corporation’s (NYSE:AMT) stock rebounded nearly 20% during the third quarter, helped by the tailwind of lower interest rates. The stock has now appreciated more than one-third since U.S. 10-Yr Treasury interest rates peaked in late April 2024. As a levered REIT, lower rates benefit AMT’s equity value through a lower cost of debt and a higher value for its long-duration cash flows. Fundamental expectations did not change materially during the quarter as the company modestly increased their growth expectations for the year. The long-term global opportunities for 5G deployment, edge-of-network computing, and datacenters, remain attractive and are not fully reflected in the current stock price, in our opinion.”
American Tower Corporation (NYSE:AMT) currently pays a quarterly dividend of $1.62 per share. While the company has not increased its dividend this year, it has consistently raised payouts at an average annual rate of 20% since 2013. The company has achieved substantial growth by expanding its data infrastructure portfolio to keep pace with the increasing demand for data. Despite facing challenges in 2024, American Tower expects a rebound starting in 2025, which will position the company to resume its dividend hikes. This outlook makes it an attractive option for investors seeking both steady income and significant growth potential. The stock has a dividend yield of 3.62%, as of December 19.
At the end of Q3 2024, American Tower Corporation (NYSE:AMT) was a favored stock among top hedge funds, with the number of hedge fund positions rising to 73, up from 63 in the previous quarter, according to Insider Monkey’s database. The total value of these holdings exceeds $3.7 billion.
Overall, American Tower Corporation (NYSE:AMT) ranks first on our list of the best dividend stocks in the telecom sector. While we acknowledge the potential for AMT to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AMT but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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