Rising dividends

American Tower (AMT) converted itself into a REIT in January 2012, and since then it’s been consistent in paying quarterly cash dividends and increasing those dividends every quarter.

Most recently, in June this year, it paid a quarterly cash dividend of $0.77 per share for the second quarter, signifying a 2.7% sequential increase and 20.3% YoY (year-over-year) growth.

American Tower Continues to Enhance Shareholder Wealth

American Tower consistently raised its annual dividend payment from $0.90 in 2012 to $2.62 in 2017, reflecting a compound annual growth rate of 23.8%.

American Tower has maintained a dividend payout ratio (dividend payment as a percentage of adjusted funds from operations) of ~40% since its conversion into a REIT. However, because the company has been able to generate higher adjusted funds from operations every year, its dividend payout in dollar terms has increased robustly. The company’s annual cash dividend payout reached $1.12 billion in 2017 from $356 million in 2012.

Peer comparison

American Tower has the lowest dividend yield compared to most of its competitors in the REIT space. At current market prices, the company’s dividend yield is 2.1%, while its competitors Crown Castle International (CCI), Realty Income (O), and Simon Property Group (SPG) have yields of 3.8%, 4.7%, and 4.5%, respectively.

Share repurchases

Share buybacks are another way American Tower has always tried to enhance shareholder wealth. Since its conversion into an REIT, the company has repurchased ~$5 billion worth of its common stock. In the second quarter, American Tower repurchased over 700,000 of its common stock for $100 million.

Additionally, American Tower bought back 0.4 million of its shares for ~$57 million from the start of the third quarter through July 24. The company has ~$2.2 billion remaining under its existing stock repurchase programs as of July 24.

American Tower makes up ~6% of the Invesco Active U.S. Real Estate ETF (PSR).

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