Shares of Crown Castle International (CCI) hit a new 52-week high of $80.52 on Aug 21, 2014. However, the company ended yesterday’s trading session a trifle lower at $80.00, reflecting a solid 17.4% return over the past 12 months.
Over the last 30 days, Crown Castle witnessed strong upward earnings estimate revisions for the current quarter leading to an 8% rise in the Zacks Consensus Estimate to 27 cents.
Higher usage of smartphones and tablets and increased deployment of 4G LTE networks have propelled demand for tower requirement by large carriers. Moreover, the acquisition of NextG Networks Inc. (which comprises 7,000 Distributed Antenna Systems) and the purchase of 7,200 wireless towers from T-Mobile USA have positioned Crown Castle as the largest wireless tower operator in the U.S. Based on such positive factors the company raised its guidance for fiscal 2014.
In the recently concluded second quarter of 2014, Crown Castle’s top line witnessed a strong 25% year-over-year growth and the figure also surpassed the Zacks Consensus Estimate.
Meanwhile, in Jan, 2014, the company started operating as a Real Estate Investment Trust (REIT). An REIT status benefits the company in terms of tax savings and also enhances long-term shareholders’ wealth. Furthermore, operating as an REIT minimizes the weighted average cost of capital. Following the conversion, Crown Castle distributes 90% of its earnings through dividends every year, thereby reducing tax.
Crown Castle currently has a Zacks Rank #3 (Hold).
Stocks That Warrant a Look
Other better-ranked stocks in the sector which are worth a look include CommScope Holding Company, Inc. (COMM), Ericsson (ERIC) and DragonWave Inc. (DRWI). CommScope sports a Zacks Rank #1 (Strong Buy) while Ericsson and DragonWave carry a Zacks Rank #2 (Buy).
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