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Is it Wise to Retain SBA Communications Stock in Your Portfolio Now?
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Key Takeaways
SBAC benefits from rising mobile data demand and 5G expansion, driving its tower-leasing growth.
SBAC expands its portfolio with 4,329 new sites and continues steady dividend and buyback plans.
High debt and reliance on key wireless carriers remain major financial and operational challenges.
SBA Communications (SBAC - Free Report) is likely to experience a healthy growth momentum with extensive infrastructure assets, driven by increased consumer demand and the adoption of data-driven mobile devices and applications. The long-term leases with its tenants assure stable revenues. Also, portfolio expansion moves are encouraging.
However, customer concentration and consolidation in the wireless industry are key near-term concerns. A leveraged balance sheet is likely to keep its financial obligations elevated.
What’s Aiding SBAC?
The advancement in mobile technology, such as 5G networks, and the proliferation of bandwidth-intensive applications have propelled growth in mobile data usage globally. With increasing smartphone adoption, greater broadband demand and plans for 5G service worldwide, wireless service providers and carriers have been deploying additional equipment for existing networks to enhance network coverage and capacity. SBA Communications’ portfolio of extensive infrastructure assets is well-poised to capitalize on this upbeat trend.
SBAC has a resilient and stable site-leasing business model. The company generates most of its revenues from long-term (typically five to 10 years) tower leases that have built-in rent escalators. With high operating margins, its tower-leasing business remains attractive.
SBAC continues to expand its tower portfolio and seeks new growth opportunities through expansion in domestic and international markets. In the second quarter, SBA Communications acquired 4,329 communication sites, including Milicom’s 4,323 sites, for a total cash consideration of $562.9 million. The company also built 94 towers during this period. Such portfolio expansion efforts will position SBA Communications to leverage secular trends in mobile data usage and wireless spending growth across the globe.
SBA Communications’ dividend hikes and share buybacks demonstrate its commitment to driving shareholder value and superior capital-distribution ability. The company has increased its dividend five times in the last five years, and its five-year annualized dividend growth rate is 18.52%. Given SBA Communications’ solid operating platform, the dividend distribution is expected to be sustainable over the long run.
Following the second quarter of 2025, SBA Communications repurchased 182,000 shares of its Class A common stock for an aggregate amount of $41.4 million under its $1.5 billion stock repurchase plan. Such efforts boost shareholders’ confidence in the stock.
What’s Hurting SBAC?
The company has a high customer concentration, with T-Mobile (TMUS - Free Report) , AT&T Wireless (T - Free Report) and Verizon Wireless (VZ - Free Report) accounting for the majority of its domestic site-leasing revenues. In the second quarter of 2025, T-Mobile, AT&T and Verizon accounted for 36.7%, 30.5% and 20.2%, respectively, of SBAC’s domestic site-leasing revenues.
Therefore, the loss of any of these customers, like TMUS, T and VZ, consolidation among them or a reduction in network spending might hurt the company’s top line significantly.
SBA Communications has a substantially leveraged balance sheet, with $12.6 billion of total debt and a net debt to the annualized adjusted EBITDA leverage of 6.5X as of the end of the second quarter of 2025. The high amount of debt is likely to keep SBA Communications’ financial obligations elevated.
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Is it Wise to Retain SBA Communications Stock in Your Portfolio Now?
Key Takeaways
SBA Communications (SBAC - Free Report) is likely to experience a healthy growth momentum with extensive infrastructure assets, driven by increased consumer demand and the adoption of data-driven mobile devices and applications. The long-term leases with its tenants assure stable revenues. Also, portfolio expansion moves are encouraging.
However, customer concentration and consolidation in the wireless industry are key near-term concerns. A leveraged balance sheet is likely to keep its financial obligations elevated.
What’s Aiding SBAC?
The advancement in mobile technology, such as 5G networks, and the proliferation of bandwidth-intensive applications have propelled growth in mobile data usage globally. With increasing smartphone adoption, greater broadband demand and plans for 5G service worldwide, wireless service providers and carriers have been deploying additional equipment for existing networks to enhance network coverage and capacity. SBA Communications’ portfolio of extensive infrastructure assets is well-poised to capitalize on this upbeat trend.
SBAC has a resilient and stable site-leasing business model. The company generates most of its revenues from long-term (typically five to 10 years) tower leases that have built-in rent escalators. With high operating margins, its tower-leasing business remains attractive.
SBAC continues to expand its tower portfolio and seeks new growth opportunities through expansion in domestic and international markets. In the second quarter, SBA Communications acquired 4,329 communication sites, including Milicom’s 4,323 sites, for a total cash consideration of $562.9 million. The company also built 94 towers during this period. Such portfolio expansion efforts will position SBA Communications to leverage secular trends in mobile data usage and wireless spending growth across the globe.
SBA Communications’ dividend hikes and share buybacks demonstrate its commitment to driving shareholder value and superior capital-distribution ability. The company has increased its dividend five times in the last five years, and its five-year annualized dividend growth rate is 18.52%. Given SBA Communications’ solid operating platform, the dividend distribution is expected to be sustainable over the long run.
Following the second quarter of 2025, SBA Communications repurchased 182,000 shares of its Class A common stock for an aggregate amount of $41.4 million under its $1.5 billion stock repurchase plan. Such efforts boost shareholders’ confidence in the stock.
What’s Hurting SBAC?
The company has a high customer concentration, with T-Mobile (TMUS - Free Report) , AT&T Wireless (T - Free Report) and Verizon Wireless (VZ - Free Report) accounting for the majority of its domestic site-leasing revenues. In the second quarter of 2025, T-Mobile, AT&T and Verizon accounted for 36.7%, 30.5% and 20.2%, respectively, of SBAC’s domestic site-leasing revenues.
Therefore, the loss of any of these customers, like TMUS, T and VZ, consolidation among them or a reduction in network spending might hurt the company’s top line significantly.
SBA Communications has a substantially leveraged balance sheet, with $12.6 billion of total debt and a net debt to the annualized adjusted EBITDA leverage of 6.5X as of the end of the second quarter of 2025. The high amount of debt is likely to keep SBA Communications’ financial obligations elevated.