American Tower Corp /Ma/ (NYSE: AMT)

Sector: Real Estate Industry: REIT - Specialty CIK: 0001053507
Market Cap 84.92 Bn
P/B 15.91
P/E 69.21
P/S 11.41
ROIC (Qtr) 9.33
Div Yield % 2.51
Rev 1y % (Qtr) 7.74
Total Debt (Qtr) 45.01 Bn
Debt/Equity (Qtr) 11.39
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About

American Tower Corporation (AMT) is a leading independent owner, operator, and developer of multitenant communications real estate. The company's primary business involves leasing space on communications sites to wireless service providers, radio and television broadcast companies, wireless data providers, government agencies, and municipalities. With a presence in the United States, Canada, Asia-Pacific, Africa, Europe, and Latin America, American Tower's communications real estate portfolio consisted of 224,502 sites as of December 31, 2023. American...

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Investment thesis

Bull case

  • Operating cash flow of 5.24B provides exceptional 62.48x coverage of minority interest expenses 83.80M, showing strong core operations.
  • Operating cash flow of 5.24B provides strong 28.38x coverage of stock compensation 184.50M, indicating sustainable incentive practices.
  • Tangible assets of 36.89B provide exceptional 84.30x coverage of deferred revenue 437.60M, showing strong service capability backing.
  • Strong operating cash flow of 5.24B provides 5.53x coverage of SG&A expenses 947.30M, showing efficient operational cost management.
  • Robust free cash flow of 3.69B exceeds capital expenditure of 1.54B by 2.39x, indicating strong organic growth funding capability.

Bear case

  • Operating cash flow of 5.24B barely covers its investment activities of (1.75B), with a coverage ratio of -2.99, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 5.24B provides thin coverage of dividend payments of (3.12B) with a -1.68 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 2.10B provide limited coverage of acquisition spending of (428.30M), which is -4.90x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Free cash flow of 3.69B represents just -10.46x of debt issuance (352.90M), suggesting concerning reliance on leverage rather than internal cash generation for growth.
  • Operating earnings of 4.64B show weak coverage of depreciation charges of 2.03B, with a 2.29 ratio indicating high capital intensity and potential reinvestment needs.

Segments Breakdown of Revenue (2024)

Product and Service Breakdown of Revenue (2024)

Peer comparison

Companies in the REIT - Specialty
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 EQIX Equinix Inc 93.20 Bn 69.03 10.11 22.73 Bn
2 AMT American Tower Corp /Ma/ 84.92 Bn 69.21 11.41 45.01 Bn
3 DLR Digital Realty Trust, Inc. 61.15 Bn 48.23 10.00 19.66 Bn
4 CCI Crown Castle Inc. 37.84 Bn 64.24 6.91 29.58 Bn
5 IRM Iron Mountain Inc 32.10 Bn 222.02 4.65 18.73 Bn
6 SBAC Sba Communications Corp 25.39 Bn 332.98 15.54 15.02 Bn
7 WY Weyerhaeuser Co 19.35 Bn 59.73 2.80 5.57 Bn
8 LAMR Lamar Advertising Co/New 12.52 Bn 427.65 10.32 4.79 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.64 1.49
EV to Cash from Ops. EV/CFO 27.98 23.58
EV to Debt EV to Debt 2.33 2.74
EV to EBIT EV/EBIT 53.74 32.67
EV to EBITDA EV/EBITDA 26.12 18.09
EV to Free Cash Flow [EV/FCF] EV/FCF 37.00 66.87
EV to Market Cap EV to Market Cap 1.24 2.19
EV to Revenue EV/Rev 14.10 9.81
Price to Book Value [P/B] P/B 15.91 0.95
Price to Earnings [P/E] P/E 69.21 70.17
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.94 3.96
Dividend Payout Ratio % Div Payout % (Qtr) 132.80 112.65
Dividend per Basic Share Div per Share (Qtr) 6.72 3.59
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 85.26 187.43
Interest Coverage Int. cover (Qtr) 3.47 4.10
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 7.58 12.53
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -7.95 105.31
Dividend Growth (1y) % Div 1y % (Qtr) 2.44 27.11
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 83.44 44.10
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 5.50 -3.90
EBIT Growth (1y) % EBIT 1y % (Qtr) 64.17 45.16
EBT Growth (1y) % EBT 1y % (Qtr) 136.85 209.40
EPS Growth (1y) % EPS 1y % (Qtr) 163.87 198.65
FCF Growth (1y) % FCF 1y % (Qtr) 3.61 -130.11
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 3.83 5.54
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.16 0.20
Cash Payout Ratio Cash Payout (Qtr) 0.46 0.17
Cash Ratio Cash Ratio (Qtr) 0.35 0.30
Current Ratio Curr Ratio (Qtr) 0.59 0.62
Debt to Equity Ratio Debt/Equity (Qtr) 11.39 1.20
Interest Cover Ratio Int Coverage (Qtr) 3.47 4.10
Times Interest Earned Times Interest Earned (Qtr) 3.47 4.10
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 63.70 59.74
EBIT Margin % EBIT Margin % (Qtr) 44.36 40.99
EBT Margin % EBT Margin % (Qtr) 31.58 18.94
Gross Margin % Gross Margin % (Qtr) 74.30 65.41
Net Profit Margin % Net Margin % (Qtr) 28.10 14.71