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Why American Tower (AMT) is a Top Dividend Stock for Your Portfolio
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All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
American Tower in Focus
Based in Boston, American Tower (AMT - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -33.15%. Currently paying a dividend of $1.47 per share, the company has a dividend yield of 3.01%. In comparison, the REIT and Equity Trust - Other industry's yield is 4.74%, while the S&P 500's yield is 1.72%.
Taking a look at the company's dividend growth, its current annualized dividend of $5.88 is up 12.9% from last year. American Tower has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 17.67%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. American Tower's current payout ratio is 58%, meaning it paid out 58% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for AMT for this fiscal year. The Zacks Consensus Estimate for 2022 is $9.84 per share, representing a year-over-year earnings growth rate of 1.97%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. It's important to keep in mind that not all companies provide a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, AMT is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).
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Why American Tower (AMT) is a Top Dividend Stock for Your Portfolio
All investors love getting big returns from their portfolio, whether it's through stocks, bonds, ETFs, or other types of securities. But for income investors, generating consistent cash flow from each of your liquid investments is your primary focus.
Cash flow can come from bond interest, interest from other types of investments, and of course, dividends. A dividend is that coveted distribution of a company's earnings paid out to shareholders, and investors often view it by its dividend yield, a metric that measures the dividend as a percent of the current stock price. Many academic studies show that dividends account for significant portions of long-term returns, with dividend contributions exceeding one-third of total returns in many cases.
American Tower in Focus
Based in Boston, American Tower (AMT - Free Report) is in the Finance sector, and so far this year, shares have seen a price change of -33.15%. Currently paying a dividend of $1.47 per share, the company has a dividend yield of 3.01%. In comparison, the REIT and Equity Trust - Other industry's yield is 4.74%, while the S&P 500's yield is 1.72%.
Taking a look at the company's dividend growth, its current annualized dividend of $5.88 is up 12.9% from last year. American Tower has increased its dividend 5 times on a year-over-year basis over the last 5 years for an average annual increase of 17.67%. Future dividend growth will depend on earnings growth as well as payout ratio, which is the proportion of a company's annual earnings per share that it pays out as a dividend. American Tower's current payout ratio is 58%, meaning it paid out 58% of its trailing 12-month EPS as dividend.
Earnings growth looks solid for AMT for this fiscal year. The Zacks Consensus Estimate for 2022 is $9.84 per share, representing a year-over-year earnings growth rate of 1.97%.
Bottom Line
Investors like dividends for a variety of different reasons, from tax advantages and decreasing overall portfolio risk to considerably improving stock investing profits. It's important to keep in mind that not all companies provide a quarterly payout.
High-growth firms or tech start-ups, for example, rarely provide their shareholders a dividend, while larger, more established companies that have more secure profits are often seen as the best dividend options. Income investors must be conscious of the fact that high-yielding stocks tend to struggle during periods of rising interest rates. With that in mind, AMT is a compelling investment opportunity. Not only is it a strong dividend play, but the stock currently sits at a Zacks Rank of 3 (Hold).