If the pricey stock market has you worried, one safe place to look at is telecommunications, especially the big carriers and the tower companies. One thing that never goes out-of-favor, even when times get tough, is people needing their phone, and most people these days operate on wireless smartphones.
A new Deutsche Bank research report stays positive on not only a large cap carrier and data center company, but also on two of the top tower companies.
The report noted this about the tower stocks:
Commentary from each of the public Tower companies implies a concurrent wave of elevated network spend from the national carriers. This is both tied to LTE network densification (adding network capacity to support unlimited plans, OTT video, etc.) as well as early 5G builds.
The four stocks are rated Buy by the Deutsche Bank team, and all make good sense for growth portfolios looking for exposure to this fast-growing sector.
This wireless tower company is a top pick on Wall Street and is acknowledged as an industry leader. American Tower Corp. (NYSE: AMT) is the largest global owner and operator of wireless and broadcast communications towers. Its portfolio includes approximately 140,000 sites in the United States, Latin America, India, Europe and Africa. The core business for the company is leasing space on its wireless towers, primarily to wireless carriers, government agencies and broadband data providers.
On a multiple basis the stock trades cheaper than the competition, and many top analysts around Wall Street feel the growth potential for the company remains among the best in the industry.
American Tower investors receive a 2.06% distribution. The Deutsche Bank price target for the stock is $169, and the Wall Street consensus target is slightly lower at $162.50. The shares closed Friday’s trading at $149.18.
Crown Castle International
This top tower stock offers incredible growth and income possibilities. Crown Castle International Corp. (NYSE: CCI) is one of the largest U.S. wireless tower companies, with over 40,000 towers across the country. Its core business is leasing space on its wireless towers primarily to wireless carriers, government agencies and broadband data providers.
The company reported solid results and appears to have momentum building through the year, and most expect the second half of 2018 will be stronger than the first half, with growing backlogs across towers, fiber and small cells.