SP Global data shows that, over a three-year period, cell tower real estate investment trusts (REITs) had the highest potential returns out of any other REIT sector of nearly 30%.
Also, cell tower REITs tend to have the lowest five-year average dividend yield of 2.5%.
Although many REITs have seen their gains wiped away by interest rate hikes, cell tower REITs should continue to hold up from a fundamental perspective. These firms tend to have leasing agreements with large wireless carriers such as Verizon Communications VZ, AT&T T, and T-Mobile US TMUS.
Also Read: These 2 Small Cap Mortgage REITs Touting Huge Yields Are Trading Well Below Their Book Value
These firms may experience more downside into 2023 as the Federal Reserve remains hawkish on its interest rate policy. This could lead to a great buying opportunity if the Fed does decide to pivot its stance against fighting inflation.
Learn more about these cell tower REITs touting above-average yields for its sector.
- Uniti Group Inc. UNIT offers a forward dividend yield of 10.10% or 60 cents per share annually, through quarterly payments, with an inconsistent track record of increasing its dividends. The company, the second-largest independent fiber network in the country, owns approximately 134,000 fiber route miles, 8 million fiber strand miles, and other communications real estate throughout the U.S. It updated its fiscal 2022 outlook on Nov. 3, revealing the firm now expects net income attributable to shareholders of between a loss of $12 million to a gain of $6 million, from a positive net income of between $189 million to $207 million, which was reported during the second quarter.
- Crown Castle Inc. CCI offers a forward dividend yield of 4.48% or $6.26 per share annually, making quarterly payments, with a strong track record of increasing its dividends for seven consecutive years. As the nation’s largest provider of shared communications infrastructure, the company's portfolio consists of more than 40,000 cell towers, some 115,000 on-air or under-contract small cell nodes, and roughly 85,000 route miles of fiber that give it a presence in every major U.S. market. For 2022, Crown Castle’s outlook has remained unchanged as they are projecting Adjusted Funds From Operations (AFFO) of between $3.178 billion to $3.223 billion, and is forecasting its fiscal 2023 AFFO to be between a range of $3.296 billion to $3.341 billion.
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