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If You Invested $1000 in Crown Castle a Decade Ago, This is How Much It'd Be Worth Now

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How much a stock's price changes over time is important for most investors, since price performance can both impact your investment portfolio and help you compare investment results across sectors and industries.

Another factor that can influence investors is FOMO, or the fear of missing out, especially with tech giants and popular consumer-facing stocks.

What if you'd invested in Crown Castle (CCI - Free Report) ten years ago? It may not have been easy to hold on to CCI for all that time, but if you did, how much would your investment be worth today?

Crown Castle's Business In-Depth

With that in mind, let's take a look at Crown Castle's main business drivers.

Houston-based Crown Castle International Corp. is a leading independent operator of wireless communication towers in the United States. The company is engaged in ownership, management and leasing of more than 40,000 cell towers and around 80,000 route miles of fiber supporting small cells, and fiber solutions spread across key markets in the nation.

On Sep 9, 2013, the board of directors of Crown Castle approved the steps needed to reorganize the company to qualify as a real estate investment trust (REIT) for tax purposes. Crown Castle became a REIT on Jan 1, 2014.

The company's operating segment consists of towers (65% of site-rental revenues in first-quarter 2021) and fiber (35%).

Crown Castle reports revenues under site rental (92% of net revenues in first-quarter 2021), and services and other (8%). The company generates site-rental revenues from its core business by entering long-term tenant contracts in various forms, including lease, licensing, sublease and service agreements with its tenants, for space or capacity at its shared communications infrastructures.

Revenues from services and other segment are generated by offering certain services primarily relating to its towers segment, consisting of site-development and installation services.

Importantly, as of Mar 31, 2021, the three major U.S. wireless carriers — Verizon, AT&T and T-Mobile — contributed 74% of the REIT's first-quarter 2021 site-rental revenues.

Note: All EPS numbers presented in this report represent funds from operations (“FFO”) per share. FFO, a widely used metric to gauge the performance of REITs, is obtained after adding depreciation and amortization and other non-cash expenses to net income.

Bottom Line

Anyone can invest, but building a successful investment portfolio takes a combination of a few things: research, patience, and a little bit of risk. So, if you had invested in Crown Castle a decade ago, you're probably feeling pretty good about your investment today.

According to our calculations, a $1000 investment made in May 2011 would be worth $4,416.47, or a gain of 341.65%, as of May 4, 2021, and this return excludes dividends but includes price increases.

The S&P 500 rose 209.05% and the price of gold increased 13.59% over the same time frame in comparison.

Looking ahead, analysts are expecting more upside for CCI.

Crown Castle’s decent first-quarter 2021 results were driven by site-rental revenue growth. The company also enhanced its 2021 guidance, backed by additional revenues to be generated from the tower lease deal with Verizon. Growth in mobile data usage, spectrum availability and high network investments by wireless carriers to deploy 5G networks at scale are likely to drive the demand for the company’s towers. Also, given its ability to offer a holistic network solution with towers, fiber and small cells and ample liquidity, it is well-poised to bank on these trends. Shares have outperformed the industry in the past three months. Yet, customer concentration is very high for Crown Castle and consolidation among them is likely to hinder its revenues. Also, a highly-leveraged balance sheet limits its ability to withstand any credit crisis.

Over the past four weeks, shares have rallied 5.78%, and there have been 8 higher earnings estimate revisions in the past two months for fiscal 2021 compared to none lower. The consensus estimate has moved up as well.

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