1. American Tower Corporation (NYSE:AMT)
Number of Hedge Fund Holders: 73
American Tower Corporation (NYSE:AMT) specializes in wireless and broadcast communications infrastructure in several countries. The challenges faced by the company are overshadowing the strong and consistent demand for communications and data infrastructure. As these challenges are anticipated to subside, the REIT has the potential to achieve significant growth starting in 2025 and beyond. The stock is down by nearly 10% since the start of 2024.
During the third quarter, a key development for American Tower Corporation (NYSE:AMT) was the sale of its underperforming Indian tower operations to Brookfield Infrastructure. This transaction allowed Brookfield to expand its presence in the Indian market, increasing its tower portfolio from 175,000 to 253,000 towers while broadening its customer base. Brookfield acquired the assets at a favorable price, as American Tower faced profitability challenges with the portfolio due to tenant-related issues. The company reported revenue of $2.52 billion in Q3 2024, which fell by 10.5% from the same period last year.
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. Though the company has not raised its dividend this year, it has increased its payouts at an annual average rate of 20% since 2013. The company experienced significant growth over the years by expanding its data infrastructure portfolio to meet rising data demand. Although it encountered challenges in 2024, the company anticipates a rebound starting in 2025, positioning itself to resume dividend increases. This outlook makes it an appealing choice for investors seeking both income and substantial growth potential. The stock supports a dividend yield of 3.28%, as of December 12.
American Tower Corporation (NYSE:AMT) was a popular stock among elite funds at the end of Q3 2024, with hedge fund positions growing to 73, from 63 in the previous quarter, according to Insider Monkey’s database. The overall value of these stakes is more than $3.7 billion.
Overall, American Tower Corporation (NYSE:AMT) ranks first on our list of the best REIT dividend stocks. 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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