I’m a retirement-focused buyer of real estate investment trusts (REITs), which means I’m interested in some income with moderate risk and reasonable expectations for share price growth.
I’m also looking to add one more REIT to my stash, because I have 10 now, and I try to diversify industry segments among them. There’s also one I’m probably going to move on from, and I like round numbers. Call me anal.
So, from among those 225 or so publicly traded REITs, I set out to pick one to buy before the end of the year.
And it is Crown Castle International (NYSE: CCI). This real estate stock checks a lot of boxes. It’s a clear leader in a narrow niche that is global in scale and clearly essential. It has a good dividend history and prospects of long-term capital appreciation. And pricing and yield-wise, it compares a bit favorably to its two main competitors -- American Tower and SBA Communications -- at the moment, at least.
Looking at a couple of high-line metrics, Crown Castle has a bit of an edge
Those three firms dominate the global market for communications towers and associated infrastructure that’s so essential to the internet of things, and everything else. Their growth and performance speak to that.
Indeed, investors in Crown Castle have already done very well, especially if you bought it as an IPO in 1998. Since then, it’s generated a total return of about 1,760%, more than thrice that of the S&P 500. Check out Matthew DiLallo’s “Is Crown Castle a Millionaire-Maker REIT?” for some more info along those lines.
But, as I said above, I’m looking at this with a bit shorter window, and right now Crown Castle offers a slightly better deal looking at their high-line metrics.
Houston-based Crown Castle was yielding 3.13%, with an annual dividend totaling $5.32 based on an Oct. 8 closing price of $169.82, down 17% from its 52-week high of $204.62 reached on July 20. The company says it currently owns, operates, and leases more than 40,000 cell towers and about 80,000 route miles of fiber supporting small cells and fiber solutions in every major American market.
Boston-based American Tower, meanwhile, was yielding 2%, with an annual dividend totaling 5.24%, based on an Oct. 8 closing price of $262.08, 13.71% below its 52-week high of $303.72 reached on Sept. 8. It’s the 800-pound gorilla in the room, with 214,000 tower sites worldwide.
And Boca Raton, Florida-based SBA Communications, with a current portfolio of almost 33,000 towers, was yielding 0.70%, with an annual dividend totaling $2.32 based on an Oct. 8 closing price of $329.86, 10.74% off its 52-week high of $369.56, also reached on Sept. 8.
The Millionacres bottom line
I think it’s a good idea to buy into this segment of infrastructure REITs, and any of these three real estate stocks would probably be a good choice. Heck, I did really well with American Tower over a couple-year span not too long ago. But for my newest buy-and-hold, I feel confident that Crown Castle will do well now and going forward, and it seems just a bit cheaper now.