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American Tower (AMT) is a Top Dividend Stock Right Now: Should You Buy?
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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 the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a 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 -33.46% so far this year. The wireless communications infrastructure company is paying out a dividend of $1.47 per share at the moment, with a dividend yield of 3.02% compared to the REIT and Equity Trust - Other industry's yield of 4.57% and the S&P 500's yield of 1.81%.
In terms of dividend growth, the company's current annualized dividend of $5.88 is up 12.9% from last year. American Tower has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 17.67%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. American Tower's current payout ratio is 58%. This means it paid out 58% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, AMT expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $9.85 per share, which represents a year-over-year growth rate of 2.07%.
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. It's important to keep in mind that not all companies provide 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. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. 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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American Tower (AMT) is a Top Dividend Stock Right Now: Should You Buy?
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 the distribution of a company's earnings paid out to shareholders; it's often viewed by its dividend yield, a metric that measures a 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 -33.46% so far this year. The wireless communications infrastructure company is paying out a dividend of $1.47 per share at the moment, with a dividend yield of 3.02% compared to the REIT and Equity Trust - Other industry's yield of 4.57% and the S&P 500's yield of 1.81%.
In terms of dividend growth, the company's current annualized dividend of $5.88 is up 12.9% from last year. American Tower has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 17.67%. Any future dividend growth will depend on both earnings growth and the company's payout ratio; a payout ratio is the proportion of a firm's annual earnings per share that it pays out as a dividend. American Tower's current payout ratio is 58%. This means it paid out 58% of its trailing 12-month EPS as dividend.
Looking at this fiscal year, AMT expects solid earnings growth. The Zacks Consensus Estimate for 2022 is $9.85 per share, which represents a year-over-year growth rate of 2.07%.
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. It's important to keep in mind that not all companies provide 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. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. 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).