In advance my choice for my depot is still $AMT (+2,69 %) because ⏬
I like the growth and the associated long-term prospects to maintain the dividend growth. The payout ratio is much lower and at the same time the dividend is continuously increased (CAGR 10y 19.9%) whether crown castel can keep up with the payout ratio in the long run, only time will tell.
And more beautiful logo 😂😜
$AMT (+2,69 %) and the one from @Simpson preffered $CCI (+1,31 %) in comparison at Seeking Alpha.
for all those who have already exhausted your free contributions on the platform, here is what is in the text without the graphics:
So from here on the opinion of the author Daniel Jones
"Summary
- American Tower and Crown Castle are both telecommunications companies that own and operate towers for data transmission.
- American Tower, with 226,000 towers, is larger than Crown Castle's 40,000 towers.
- Crown Castle is superior to American Tower in terms of profitability, return on investment, debt and valuation, making it a more attractive prospect."
A brief description of our candidates
If you're reading this article, you probably already know something about these two companies. However, it might be helpful to provide a little information about what each feature is and how they operate. They are both in the same industry and their primary business is owning and operating towers that enable the transmission of data. Simply put, without them, the world would come to a standstill. In terms of size, American Tower is the frontrunner. The network has more than 226,000 towers, including towers it does not own but operates. By comparison, Crown Castle owns more than 40,000 towers.
If this seems like a massive disparity, consider that about 78,000 of the towers owned by American Tower are in the Asia-Pacific region (mainly India) and are nowhere near as important to the company as some towers elsewhere. For example, although towers in Asia-Pacific account for 34.5% of the physical towers the company owns or operates, this region is responsible for only 10.1% of the company's revenue.
As we dive deeper into the fundamentals, you'll notice that the two companies are much closer in size than they appear just by looking at the number of towers.
Of course, the companies have other assets as well. Both are investing significantly in fiber. I couldn't find out how many miles of fiber this American Tower has.
But Crown Castle has about 85,000 route miles of fiber in its network. In addition, both companies are making other investments, such as in small cellular networks.
Currently, Crown Castle has about 120,000 small cells on its network, which provide efficient communications in incredibly densely populated areas. There are other differentiators as well. For example, while Crown Castle has not focused on data center ownership, American Tower has with its Übernahme massiv in diesen Bereich investiertof CoreSite, a purchase that cost $10.1 billion on an enterprise value basis. Since then, the company has expanded CoreSite's data center operations from 25 to 28 sites.
Why you should buy American Tower
To be honest, I could write a whole long article about these various assets and other investments that these two companies have made. However, my goal is to figure out which perspective makes the most sense for investors. As I stated in the introduction to this article, I believe Crown Castle is the superior play in many ways. But before I go into more detail about why that is, it would only be fair to point out a few aspects in which American Tower is better. First of all, the company is bigger. In 2022, American Tower generated $10.71 billion in revenue. That's an increase over Crown Castle's revenue of $6.99 billion in the same year. Revenue growth has also been more impressive. Over the last three completed fiscal years, American Tower has increased its revenue by 33.2%. In the same time frame
The company's particular focus on data centers could also be a reason why American Tower might be more attractive to some investors than others.
This is a fairly large market opportunity, totaling $279.5 billion in 2022 alone. By 2032, it is expected to grow to $565.5 billion thanks to an annual growth rate of 7.3%. However, this is a very expensive market, as evidenced by CoreSite's $10.1 billion purchase price compared to the fact that data center operations alone accounted for only 7.5% of American Tower's reported revenue last quarter .
But Crown Castle deserves the crown
Outside of these areas, I see no reason to prefer American Tower over Crown Castle. For example, when we talk about profitability, Crown Castle is the clear leader.
The company's net profit margin of 24% in 2022 clearly exceeded American Tower's reported 16.5%. But it's not just about net profit margin.
Nearly every profitability metric was better year-over-year. The only exception was FFO, or funds from operations. Crown Castle's reported FFO margin was 48.1%. This is slightly lower than the 49.3% reported by American Tower. While I take no pleasure in saying this, it is likely that Crown Castle's profitability will increase even further compared to American Tower's reports.
I say that because Crown Castle's management team announced earlier this year that it would cut 15% of its workforce, incurring costs of just $120 million in the process.
Crown Castle is not only more profitable, but also offers a much more attractive yield. At this point, the stock yields 6.29%. That is significantly more than the 3.53% that American Tower yields. There are two main reasons why the yield is higher. First, the company has a higher payout ratio if we use adjusted operating cash flow, which is operating cash flow excluding changes in working capital, as the numerator of the equation.
This payout ratio, based on 2022 data, is 71.8%. In comparison, this ratio for American Tower is 49.5%. To some extent, this could also explain why American Tower is growing faster. With less money going to pay out a distribution, there is more money left over to focus on growth. But even if Crown Castle's payout ratio ended up being lowered to American Tower's payout ratio, the yield would still be higher at 4.34%. This brings us to the second reason, which is that shares of both companies have fallen over the past year. But Crown Castle's decline was even more significant. The company's shares are down 43.1%, compared to American Tower's 33% decline.
There are two other reasons why I prefer Crown Castle to its counterpart. The first of these is that there is less leverage. If we use the balance sheet data for each company as of the second quarter of fiscal 2023 and assume that each company meets the midpoint of the forecast for the year in terms of profitability, we end up with a net leverage ratio for American Tower of 5.24. For Crown Castle, that number is 4.96. etwas niedriger . I wouldn't say either company is overleveraged. But lower leverage, all other things being equal, leads to lower risk.
Finally, there's the issue of valuation. In the chart above, you can see how Crown Castle's shares are valued using estimates for 2023 and actual results for 2022. I then took two of those metrics and compared them in the first chart below on a forward basis the prices I get for American Tower. In the case where Crown Castle was trading at the price of the adjusted operating cash flow multiple that American Tower is currently trading at, the upside potential for the company would be 58.8%. And if we do the same analysis using the EV-to-EBITDA approach, the upside potential is 80.5%.Based on all the data I have, I have to say that I think Crown Castle is a pretty compelling prospect. The stock is definitely not in the value range. But considering how high-quality the company is, it's cheap enough to warrant a significant amount of optimism. American Tower is also a great company, but the shares are more expensive.
Beyond that, there are other negatives that work against it. If your goal is to achieve international growth and you prioritize revenue growth, this may be the most sensible option of the two. However, if you're looking for a cash cow with an attractive yield and a more efficient operation, all at a bargain price, Crown Castle is certainly the right choice."
So now sorry for just copying this but I think this is really a class article and here are many who are passionate about both companies 🕵️
