Crown Castle International Corp.: This Top Dividend Stock Yields 4%
1 Top Dividend Stock
Today, let’s check in on a big “picks-and-shovels” winner in the mobile data boom.
Income Investors readers have probably heard of our idea of investing in picks-and-shovels businesses. These companies don’t bet the farm on a single project. Instead, they sell goods and services to an entire industry. It’s the safer (and sometimes more profitable) way to invest in a sector.
Take cell phone tower owner Crown Castle International Corp. (NYSE:CCI).
I may not know which tech giant will win the smartphone war, but I do know that all of these devices will chug down a lot of data. That means growing profits for businesses like Crown Castle, regardless of which gadget maker comes out on top.
And business, it seems, is booming.
The number of mobile devices in the U.S. recently surpassed 500 million, nearly double the number in service in 2012. Services like music downloads, streaming video, and social networking also suck down data. North American data usage is projected to grow by 35% annually through 2021, according to a recent report by telecommunications company Ericsson AB. (Source: “Mobile Data Usage Will Explode In Next 5 Years Thanks To Faster Network Speeds: Ericsson,” Twice, June 6, 2016.)
This is good news for cell phone tower landlords. To accommodate the growing demand for data, carriers will need to build out their mobile networks. That means higher lease prices for customers and higher profits for Crown Castle.
Over the past five years, the company’s fund flows from operations have grown at a mid-teen annual clip. Going forward, Wall Street expects profits to grow more or less in line with historical trends.
Most of these profits should get passed on to shareholders. Since 2009, Crown Castle units have increased more than sevenfold in price. And since management began paying dividends in 2014, the payout has tripled. Today, the units pay out a quarterly distribution of $1.05 each, which comes out to an annual yield of four percent.
Chart courtesy of StockCharts.com
As long as folks stay glued to their smartphones, mobile picks-and-shovels businesses like Crown Castle International Corp. should keep doing well.
Dear Reader: There is no magic formula to getting rich. Success in investment vehicles with the best prospects for price appreciation can only be achieved through proper and rigorous research and analysis. We are 100% independent in that we are not affiliated with any bank or brokerage house. Information contained herein, while believed to be correct, is not guaranteed as accurate. Warning: Investing often involves high risks and you can lose a lot of money. Please do not invest with money you cannot afford to lose. The opinions in this content are just that, opinions of the authors. We are a publishing company and the opinions, comments, stories, reports, advertisements and articles we publish are for informational and educational purposes only; nothing herein should be considered personalized investment advice. Before you make any investment, check with your investment professional (advisor). We urge our readers to review the financial statements and prospectus of any company they are interested in. We are not responsible for any damages or losses arising from the use of any information herein. Past performance is not a guarantee of future results. All registered trademarks are the property of their respective owners
Sign up to receive our FREE Income Investors newsletter along with our special offers and get our FREE report:
5 Dividend Stocks to Own Forever
This is an entirely free service. No credit card required. You can opt-out at anytime.
We hate spam as much as you do.