Crown Castle International Corp. (CCI) – a leading independent operator of wireless communication towers in the U.S. – has started functioning as a Real Estate Investment Trust (REIT) from Jan 1, 2014. Earlier, in 2012, the company’s closest rival American Tower Corp. (AMT) also converted itself into a REIT.
A REIT status will benefit the company in terms of tax savings and enhancing long-term shareholders wealth. Moreover, it will also minimize the weighted average cost of capital. Following the conversion, Crown Castle will distribute 90% of its earnings through dividends every year, reducing tax.
Recently, Crown Castle decided to pay a quarterly cash dividend on its 4.50% Mandatory Convertible Preferred Stock on Feb 3, 2014 to holders of record as on Jan 15, 2014. The rate of dividend is $1.1625 per share.
In the third quarter of 2013, Crown Castle reported mixed financial results with the bottom line missing the Zacks Consensus Estimate but the top line surpassing the same. The company exited the third quarter with $218.6 million of cash and a huge debt of $10,660.1 million. Crown Castle expects Site Rental revenues for the fourth quarter to be in the range of $625 to $630 million while AFFO is estimated in the $318 – $323 million band.
Crown Castle currently has a Zacks Rank #3 (Hold).
Other Stocks to Consider
Other better-ranked stocks in the wireless tower industry include Arris Group Inc. (ARRS) and SBA Communications Corp. (SBAC). Arris carries a Zacks Rank #1 (Strong Buy) while SBA Communications holds a Zacks Rank #2 (Buy).
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