American Tower vs Crown Castle Which Is Superior?

American Tower and Crown Castle are two of the largest players in the real estate investment trust (REIT) sector focused on owning and operating telecommunications infrastructure. Both companies are known for their extensive portfolio of towers, small cells, and fiber optic networks that serve as the backbone for wireless communications in the United States. Investors often compare American Tower and Crown Castle stocks due to their similar business models, growth prospects, and dividend yields. In this analysis, we will delve into the key differences and similarities between the two companies to help investors make informed decisions.

American Tower or Crown Castle?

When comparing American Tower and Crown Castle, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between American Tower and Crown Castle.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. American Tower has a dividend yield of 3.32%, while Crown Castle has a dividend yield of 6.34%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. American Tower reports a 5-year dividend growth of 15.41% year and a payout ratio of 276.77%. On the other hand, Crown Castle reports a 5-year dividend growth of 7.93% year and a payout ratio of 222.15%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with American Tower P/E ratio at 83.25 and Crown Castle's P/E ratio at 34.99. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. American Tower P/B ratio is 25.38 while Crown Castle's P/B ratio is 8.11.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, American Tower has seen a 5-year revenue growth of 0.41%, while Crown Castle's is 0.23%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with American Tower's ROE at 28.21% and Crown Castle's ROE at 21.01%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $197.43 for American Tower and $98.67 for Crown Castle. Over the past year, American Tower's prices ranged from $170.46 to $243.56, with a yearly change of 42.88%. Crown Castle's prices fluctuated between $92.48 and $120.92, with a yearly change of 30.75%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.