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This is Why American Tower (AMT) is a Great Dividend Stock
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Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
American Tower in Focus
Headquartered in Boston, American Tower (AMT - Free Report) is a Finance stock that has seen a price change of -4.13% so far this year. The wireless communications infrastructure company is currently shelling out a dividend of $1.21 per share, with a dividend yield of 2.25%. This compares to the REIT and Equity Trust - Other industry's yield of 3.38% and the S&P 500's yield of 1.38%.
In terms of dividend growth, the company's current annualized dividend of $4.84 is up 6.8% from last year. In the past five-year period, American Tower has increased its dividend 5 times on a year-over-year basis for an average annual increase of 20.23%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, American Tower's payout ratio is 57%, which means it paid out 57% of its trailing 12-month EPS as dividend.
AMT is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2021 is $9.31 per share, representing a year-over-year earnings growth rate of 10.31%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. However, not all companies offer a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, AMT is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).
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This is Why American Tower (AMT) is a Great Dividend Stock
Whether it's through stocks, bonds, ETFs, or other types of securities, all investors love seeing their portfolios score big returns. However, when you're an income investor, your primary focus is generating consistent cash flow from each of your liquid investments.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
American Tower in Focus
Headquartered in Boston, American Tower (AMT - Free Report) is a Finance stock that has seen a price change of -4.13% so far this year. The wireless communications infrastructure company is currently shelling out a dividend of $1.21 per share, with a dividend yield of 2.25%. This compares to the REIT and Equity Trust - Other industry's yield of 3.38% and the S&P 500's yield of 1.38%.
In terms of dividend growth, the company's current annualized dividend of $4.84 is up 6.8% from last year. In the past five-year period, American Tower has increased its dividend 5 times on a year-over-year basis for an average annual increase of 20.23%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. Right now, American Tower's payout ratio is 57%, which means it paid out 57% of its trailing 12-month EPS as dividend.
AMT is expecting earnings to expand this fiscal year as well. The Zacks Consensus Estimate for 2021 is $9.31 per share, representing a year-over-year earnings growth rate of 10.31%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. However, not all companies offer a quarterly payout.
Big, established firms that have more secure profits are often seen as the best dividend options, but it's fairly uncommon to see high-growth businesses or tech start-ups offer their stockholders a dividend. During periods of rising interest rates, income investors must be mindful that high-yielding stocks tend to struggle. With that in mind, AMT is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).