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Tower REITs: Dividend Safety vs. High Yield
26 Oct
Summary
- Tower REITs' dividends rely on tenant rent stability.
- American Tower boasts over 148,000 global tower sites.
- Crown Castle offers the highest yield but thinnest coverage.
The cell tower industry, dominated by REITs like American Tower, Crown Castle, and SBA Communications, is experiencing renewed demand driven by the need to double network capacity by 2030 and the upcoming release of new mobile spectrum. These REITs, which own physical towers, depend on long-term leases with wireless carriers for their dividends.
American Tower, a major player with over 148,000 sites globally and data centers, is focusing on 5G capacity, expecting strong growth from its CoreSite subsidiary. It offers a 3.79% yield, with its dividend comfortably covered by expected AFFO.
Crown Castle, now a pure-play U.S. tower owner, provides the highest yield at 4.94%. However, its dividend coverage is tight, using about 92.4% of its 2026 AFFO per share guidance, and it previously cut its dividend.
SBA Communications offers the lowest yield of the three at 2.71%, but boasts the strongest dividend coverage at approximately 41% of AFFO. The company is seeing significant growth internationally and expects new tower builds in 2026.
