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Crown Castle Inc's Dividend Analysis

An In-depth Look at Crown Castle Inc's Dividend Performance and Sustainability

Crown Castle Inc (NYSE:CCI) recently announced a dividend of $1.57 per share, payable on 2024-06-28, with the ex-dividend date set for 2024-06-14. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Crown Castle Inc's dividend performance and assess its sustainability.

What Does Crown Castle Inc Do?

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Crown Castle International owns and leases roughly 40,000 cell towers in the United States. It also owns more than 85,000 route miles of fiber. It leases space on its towers to wireless service providers, which install equipment on the towers to support their wireless networks. The company's fiber is primarily leased by wireless service providers to set up small-cell network infrastructure and by enterprises for their internal connection needs. Crown Castle's towers and fiber are predominantly located in the largest U.S. cities. The company has a very concentrated customer base, with about 75% of its revenue coming from the big three U.S. mobile carriers. Crown Castle operates as a real estate investment trust.

Crown Castle Inc's Dividend Analysis
Crown Castle Inc's Dividend Analysis

A Glimpse at Crown Castle Inc's Dividend History

Crown Castle Inc has maintained a consistent dividend payment record since 2014. Dividends are currently distributed on a quarterly basis.

Crown Castle Inc has increased its dividend each year since 2014. The stock is thus listed as a dividend achiever, an honor that is given to companies that have increased their dividend each year for at least the past 10 years.

Crown Castle Inc's Dividend Analysis
Crown Castle Inc's Dividend Analysis

Breaking Down Crown Castle Inc's Dividend Yield and Growth

As of today, Crown Castle Inc currently has a 12-month trailing dividend yield of 6.29% and a 12-month forward dividend yield of 6.29%. This suggests an expectation of same dividend payments over the next 12 months.

Over the past three years, Crown Castle Inc's annual dividend growth rate was 8.30%. Extended to a five-year horizon, this rate increased to 8.40% per year.

Based on Crown Castle Inc's dividend yield and five-year growth rate, the 5-year yield on cost of Crown Castle Inc stock as of today is approximately 9.41%.

Crown Castle Inc's Dividend Analysis
Crown Castle Inc's Dividend Analysis

The Sustainability Question: Payout Ratio and Profitability

To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2024-03-31, Crown Castle Inc's dividend payout ratio is 1.79. And this may suggest that the company's dividend may not be sustainable.

Crown Castle Inc's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Crown Castle Inc's profitability 9 out of 10 as of 2024-03-31, suggesting good profitability prospects. The company has reported positive net income for each of year over the past decade, further solidifying its high profitability.

Growth Metrics: The Future Outlook

To ensure the sustainability of dividends, a company must have robust growth metrics. Crown Castle Inc's growth rank of 9 out of 10 suggests that the company 's growth trajectory is good relative to its competitors.

Revenue is the lifeblood of any company, and Crown Castle Inc's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Crown Castle Inc's revenue has increased by approximately 5.40% per year on average, a rate that outperforms than approximately 54.66% of global competitors.

The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Crown Castle Inc's earnings increased by approximately 13.60% per year on average, a rate that outperforms than approximately 60.57% of global competitors.

Lastly, the company's 5-year EBITDA growth rate of 23.50%, which outperforms than approximately 87.61% of global competitors.

Conclusion

Given Crown Castle Inc's consistent dividend growth, robust profitability, and strong growth metrics, the company appears well-positioned to sustain its dividend payments. However, the high payout ratio may warrant caution. Investors should keep an eye on these metrics to ensure continued dividend reliability. For those looking to explore further, GuruFocus Premium users can screen for high-dividend yield stocks using the High Dividend Yield Screener.

This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.

This article first appeared on GuruFocus.