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American Tower: A Compelling Long-Term Investment

Apr. 05, 2021 8:14 AM ETAmerican Tower Corporation (AMT)13 Comments
Kody's Dividends profile picture
Kody's Dividends


  • American Tower maintained respective consolidated AFFO/share and FCF payout ratios of 53.4% and 67.7% in 2020, which are both quite sustainable over the long term.
  • Despite what was a challenging operating environment for most businesses, American Tower grew its revenues 6.1% in 2020 and its consolidated AFFO/share advanced 7.5% during the year.
  • What's more, American Tower anticipates that 2021 will be an even stronger year, with 8.4% consolidated AFFO/share growth.
  • Solidifying the case for an investment in American Tower is the fact that I estimate shares of the stock are trading at a 3% discount to fair value.
  • Between its 2.1% yield, 8.0-9.0% annual consolidated AFFO/share growth, and 0.3% annual valuation multiple expansion, I believe shares of American Tower are positioned to meet my 10% annual total return requirement over the next decade.

5G Cell Tower At Sunset: Cellular communications tower for mobile phone and video data transmission
Photo by grandriver/E+ via Getty Images

As an investor, my investment strategy is to identify and allocate capital to high-quality businesses that provide essential goods and/or services to society at attractive valuations over the long term.

In the current century, few, if

This article was written by

Kody's Dividends profile picture
Hi, my name is Kody. I run Kody's Dividends. As you might guess, this is a blog primarily documenting my journey towards financial independence using dividend growth investing as the means to transform the dream of financial independence into a reality.I am forever indebted to this community because it helped me transition from simply being an investor to being an analyst for The Motley Fool back in June 2021 under my real name of Kody Kester. As a display of my gratitude, I will still be writing one article a month for SA starting in July 2022.

Analyst’s Disclosure: I am/we are long T, VZ. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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