Big Cap 20 stockAmerican Tower (
), which operates cellular towers used by wireless companies and
broadcasters, has risen sharply this year amid growing demand for
The stock is near a new high after climbing 28% year-to-date,
easily outpacing the S&P's 14% increase. The company recently
increased its quarterly dividend by a penny, or 4%, to 24 cents a
share. That brings the annual dividend yield to 1.3% compared
with the 2.1% average for the S&P.
Demand for wireless towers has soared along with sales of
smartphones, tablets and other devices that connect to the
Internet via wireless communications networks. The evolution into
faster 4G networks is also benefiting American Tower and
rivalsCrown Castle International (
) andSBA Communications (
Yet American Tower's fundamentals are mixed. Profit has been
choppy, shooting up to $0.58 a share in Q3 from a $0.04 loss in
the year-earlier period. But Q2 profit declined 59%, and Q4
earnings are seen slipping 18%.
Meanwhile, sales growth has slowed for two straight quarters,
rising just 13% in Q3.
Nevertheless, Zacks Investment Research said earlier this
month that American Tower's global expansion strategy and growing
demand for towers to speed data transmission bode well for the
"Massive demand for wireless data and video throughout the
world will boost American Tower's long-term growth," Zacks said.
It has a neutral rating on the stock, however, citing its strong
run-up over the past year.
Institutional investors have boosted their holdings for two
straight quarters, led by top funds such as the Fidelity Magellan
Fund and the Columbia Marsico 21st Century Fund.
American Tower earns about three-quarters of its revenue in
the U.S., but it's been expanding into fast-growing markets in
Asia and Latin America.
The stock recently cleared resistance at 76, though volume was
weak. Meanwhile, AMT's up-down volume ratio has edged down to 1,
indicating a standoff between buyers and sellers.