American Tower AMT owns a diversified communications real estate portfolio across the United States, Europe, Latin America, Africa and select Asia-Pacific markets, with long-term tenant leases that include contractual rent escalators.
Carrier investment in 4G and 5G networks, alongside rising mobile data usage, fixed wireless access and growing cloud-computing and AI workloads, should sustain amendment and colocation activity over time. The company maintains access to capital and returns cash to shareholders through dividends and selective buybacks.
Shares of this Zacks Rank #2 (Buy) company have gained 4.4% over the past three months compared with the industry's growth of 3.8%. Given the strength of its fundamentals, there seems to be additional room for this stock’s growth.
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Factors That Make American Tower a Solid Pick
Favorable Industry Tailwinds: The advancement in mobile technology, such as 4G and 5G, and the proliferation of bandwidth-intensive applications, propel growth in mobile data usage globally. Amid this, wireless service providers and carriers have been deploying additional equipment for existing networks to enhance network coverage and capacity. Given its portfolio of nearly 149,000 communication sites worldwide, American Tower is strategically positioned to capture this incremental demand.
Long Term Leases: American Tower generates most of its revenues from non-cancellable, long-term tenant leases on its communications sites with major wireless carriers. These leases typically have an initial term of five to 10 years with multiple renewal options. Most leases have provisions that periodically increase rent, typically annually. This arrangement brings in revenue stability for AMT.
Data Center Boom: With growth in cloud computing, the Internet of Things and big data, more enterprises are using third-party data center capacity. In first-quarter 2026, AMT’s data center property revenues increased to $289 million from $244 million, and management cited higher demand tied to hybrid and multicloud deployments, AI-related use cases and greater interconnection activity. For full-year 2026, management expects data center property revenues of $1.175-$1.195 billion, implying about 12.5% growth year over year, and plans roughly $695 million of development spend.
Robust Balance Sheet: American Tower has a robust operating platform and ample liquidity to support its debt servicing. As of March 31, 2026, the company had $10.4 billion in total liquidity. Debt remained largely fixed-rate at 94% and 6% floating as of March 31, 2026, and the weighted average remaining term was 5.1 years. As of the end of the first quarter of 2026, it enjoyed the investment-grade credit ratings of BBB+ from S&P, BBB+ from Fitch and Baa2 from Moody’s, all with stable outlooks. This enables the company to borrow at a favorable rate.
Sustainable Dividend Payout: American Tower has a disciplined capital distribution strategy and remains committed to increasing shareholder value through regular dividend hikes. In March 2026, it raised its quarterly cash distribution to $1.79 per share, up 5.3% year over year. It has increased its dividend 12 times in the past five years, with an annualized dividend growth rate of 5.84%. Backed by robust operating fundamentals, we expect the company’s dividend distribution to be sustainable in the upcoming period.
Other Stocks to Consider
Some other top-ranked stocks from the broader REIT sector are Lamar Advertising LAMR and Vornado Realty Trust VNO, each carrying a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for LAMR’s 2026 FFO per share has been revised upward 2.2% to $8.81 over the past two months.
The consensus estimate for VNO’s 2026 FFO per share has been revised up marginally over the past month to $2.34.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO), a widely used metric to gauge the performance of REITs.
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American Tower Corporation (AMT): Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).