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SBA Communications Corp's Dividend Analysis

Exploring the Dividend Performance and Sustainability of SBA Communications Corp

SBA Communications Corp (NASDAQ:SBAC) recently announced a dividend of $0.98 per share, payable on 2024-06-19, with the ex-dividend date set for 2024-05-22. 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 SBA Communications Corp's dividend performance and assess its sustainability.

What Does SBA Communications Corp Do?

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SBA Communications owns and operates almost 40,000 cell towers throughout North America, South America, and Africa. It leases space on its towers to wireless service providers, which install equipment on the towers to support their wireless networks. The company has a very concentrated customer base, with most revenue in each market being generated by just the top few mobile carriers. It owns more than 17,000 towers in the US, which accounted for about 70% of the company's total revenue in 2023. Internationally, SBA's greatest presence is in Brazil, where it operates roughly 10,000 towers. SBA operates as a real estate investment trust.

SBA Communications Corp's Dividend Analysis
SBA Communications Corp's Dividend Analysis

A Glimpse at SBA Communications Corp's Dividend History

SBA Communications Corp has maintained a consistent dividend payment record since 2019. Dividends are currently distributed on a quarterly basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.

SBA Communications Corp's Dividend Analysis
SBA Communications Corp's Dividend Analysis

Breaking Down SBA Communications Corp's Dividend Yield and Growth

As of today, SBA Communications Corp currently has a 12-month trailing dividend yield of 1.77% and a 12-month forward dividend yield of 2.00%. This suggests an expectation of increased dividend payments over the next 12 months. SBA Communications Corp's dividend yield of 1.77% is near a 10-year high and outperforms 4.51 of global competitors in the REITs industry, suggesting that the company's dividend yield stands out as an attractive proposition for income investors.

Over the past three years, SBA Communications Corp's annual dividend growth rate was 22.30%. Based on SBA Communications Corp's dividend yield and five-year growth rate, the 5-year yield on cost of SBA Communications Corp stock as of today is approximately 1.77%.

SBA Communications Corp's Dividend Analysis
SBA Communications Corp'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, SBA Communications Corp's dividend payout ratio is 0.52. SBA Communications Corp's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks SBA Communications Corp's profitability 9 out of 10 as of 2024-03-31, suggesting good profitability prospects. The company has reported net profit in 8 years out of the past 10 years.

Growth Metrics: The Future Outlook

To ensure the sustainability of dividends, a company must have robust growth metrics. SBA Communications Corp'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 SBA Communications Corp's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. SBA Communications Corp's revenue has increased by approximately 10.70% per year on average, a rate that outperforms approximately 75.33% 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, SBA Communications Corp's earnings increased by approximately 106.90% per year on average, a rate that outperforms approximately 93.08% of global competitors. Lastly, the company's 5-year EBITDA growth rate of 52.60%, which outperforms approximately 95.47% of global competitors.

Next Steps

Considering SBA Communications Corp's consistent dividend payments, robust dividend growth rate, prudent payout ratio, strong profitability, and impressive growth metrics, the company appears well-positioned to continue providing value to its shareholders through sustainable dividends. Investors seeking to diversify their portfolios with high-dividend yield stocks may find SBA Communications Corp an attractive option. 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.