Summary: For those who wish to invest in real estate but don’t want to or don’t know how to manage property themselves, a real estate investment trust (REIT) might be the perfect choice. In this guide, we go over the top 5 cell tower REITS to invest in 2024 through an online investment platform such as eToro and cover some of the risks and considerations new investors ought to keep in mind.
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About cell tower REITs
As mobile technology advances and becomes more widespread, the need for cell towers to transmit signals to and from devices rises, especially in urban and remote areas. As a consequence, cell tower REITs are becoming an attractive investment option, especially since they generate steady income from long-term leases with wireless carriers.
What’s more, REITs are required by law to distribute at least 90% of their taxable income to shareholders in the form of dividends.
Top 5 cell tower REITs to invest in 2024
Since phone signal coverage has never been more important, there have never been more options for cell tower REITs at investors’ disposal. Here are our top 5 cell tower REITs to invest in 2024:
- American Tower Corporation (NYSE: AMT);
- Crown Castle International (NYSE: CCI);
- SBA Communications (NASDAQ: SBAC);
- Digital Realty Trust (NYSE: DLR);
- Uniti Group (NASDAQ: UNIT).
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Let’s take a look at each of them individually.
1. American Tower Corporation (AMT)
American Tower Corporation is by far the largest cell tower REIT in the world, with a market capitalization of over $95 billion and nearly 225,000 communications sites (as of January 2024), including towers, rooftops, and small cells. If you’re looking for strong revenue and a domineering global presence, AMT shares are likely the way to go.
American Tower stock price today
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2. Crown Castle International (CCI)
Crown Castle International is another leading cell tower REIT. It enjoys a market capitalization of over $46 billion and boasts a portfolio of over 80,000 cell towers and just as many miles of fiber (as of January 2024). Crown Castle came into the spotlight because of its strong focus on investing in 5G infrastructure, which many investors hope will result in growth in the coming years. So, if future growth is what you’re looking for, CCI is worth keeping an eye on.
Crown Castle stock price today
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3. SBA Communications Corporation (SBAC)
SBA Communications Corporation is a smaller REIT, with a market capitalization of just north of $25 billion (as of January 2024). It mostly operates in the US, although it has some presence in South America as well. Despite its modest size, however, the company has seen its stock grow almost 40% in the past five years. If you’re looking to target a more narrow market but are still hopeful for future prospects, SBAC is definitely worth checking out.
SBA Communications stock price today
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4. Digital Realty Trust (DLR)
Digital Realty Trust specializes in data centers. The company has a market capitalization of just over $40 billion and owns over 300 data centers on six continents (as of January 2024). Recently, the company made some strategic moves in the sector, joining hands with Blackstone and announcing a $7-billion hyperscale data center plan. Naturally, the partnership grabbed the attention of many investors, so be sure you stay up-to-date with any pertinent news.
Digital Realty Trust stock price today
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5. Uniti Group (UNIT)
Uniti Group operates as a REIT with a primary focus on acquiring infrastructure within the communications industry (e.g., fiber, towers, Competitive Local Exchange Carrier (CLEC), etc.). Although the company’s stock has not been performing at its peak as of late, its 11.17% annual dividend yields (as of January 2024) are enough for many to give it a shot.
Uniti Group stock price today
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– Top 5 Mortgage REITs to Invest in 2024;
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Where to invest in cell tower REITs?
To invest in cell tower REITs, you can open a trading account with an online investment platform. Our recommended platform is eToro, a brokerage with millions of active users and trading features such as:
- Commission-free stock trading;
- Access to over 2,000 stocks from 17 different exchanges;
- The option to purchase fractional shares;
- Charting tools;
- A user-friendly platform that simplifies the trading experience.
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Invest in 2,800+ stocks and other assets including 70+ cryptocurrencies and commodities.
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How to invest in cell tower REITs safely
Investing in Cell Tower REITs can be a lucrative opportunity for investors looking for a stable source of income. However, it is important to have a well-thought-out investment strategy before investing in any REIT. Here are some investment strategies that you can use to invest in Cell Tower REITs.
- Diversify: Diversification is key to reducing risk, no matter what you’re investing in. You can diversify by investing in multiple cell tower REITs that operate in different regions or target different kinds of infrastructure, or you can invest in some other financial assets;
- Conduct detailed analysis: Before investing, try to consider the financial health of the company whose shares you are buying. More specifically, look for REITs with a strong balance sheet, low debt-to-equity ratio, good dividends, and solid leadership;
- Think long-term: Look for REITs with tenants who have long-term leases and a history of renewing their leases for more stable income in the long run;
- Think about the property: Geographical factors are crucial when investing in REITs. Look for REITs operating in areas with high demand for wireless communication services, such as areas with high population density, business districts, and areas where the competition is not as fierce.
Risks associated with cell tower REITs
Investing in cell tower REITs can be lucrative. However, it’s important to consider the risks associated with such investments. For starters, consider challenges such as:
- Dependence on telecom companies: By nature, cell tower REITs are heavily dependent on telecom companies. If a telecom service provider decides to end its lease, relocate, or switch focus, it could significantly impact the REIT. So, try to research the REIT leases before investing;
- Regulatory risks: Cell tower REITs are subject to various regulations at federal and local levels. Any changes in regulations could impact their ability to invest in new towers or expand their services, negatively impacting their revenue and growth prospects;
- Competitive landscape: The cell tower industry is highly competitive, which could negatively impact some specific REIT’s profitability. Moreover, failure to adapt to or drive new technologies could also have negative consequences;
- Interest rate risk: All REITs are sensitive to interest rate changes. That is, if interest rates go up, property value decreases, which could negatively impact profitability. Additionally, rising interest rates sometimes lead to a decrease in demand.
Feature note: For more investment opportunities, you can explore our guides on:
- Office REITs;
- High Dividend REITs;
- Data Center REITs;
- Apartment REITs;
- Farmland REITs;
- Industrial REITs;
- Self Storage REITs;
- Hotel REITs.
Pros and cons of investing in cell tower REITs
Pros
- Passive income: REITs tend to generate stable passive income through long-term leases;
- Growing demand: As our demand for wireless data continues to grow, the need for cell towers and wireless infrastructure likewise goes up;
- Dividends: REITs are required to distribute at least 90% of their earnings as dividends;
- Hands-off investments: Unlike traditional real estate, REITs don’t require any hands-on management;
- Diversification: Investing in cell tower REITs can help you diversify.
Cons
- Dependency on the rest of the mobile phone industry: Cell tower REITs depend on the telecommunications industry. Consequently, changes in technology or regulatory issues can impact their performance;
- Lease problems: Some REITs depend on a small number of tenants. If they leave, the REIT could suffer;
- Interest rate sensitivity: All REITs are sensitive to changes in interest rates. When interest rates go up, the overall expenses likewise go up, potentially impacting stock prices negatively.
Disclaimer: The content on this site should not be considered investment advice. Investing is speculative. When investing, your capital is at risk.
FAQs about cell tower REITs
What are the top 5 cell tower REITs to invest in 2024?
The top cell tower REITs with the most growth potential in 2024 include American Tower Corporation (NYSE: AMT), Crown Castle International (NYSE: CCI), SBA Communications (NASDAQ: SBAC), Digital Realty Trust (NYSE: DLR), Uniti Group (NASDAQ: UNIT).
What are the key factors to consider when investing in cell tower REITs?
When investing in a cell tower REIT, it is important to consider factors such as the company’s track record, asset portfolio, financial stability, and growth potential. Additionally, investors should consider dividend yields, as REITs are obliged to distribute over 90% of their revenue as dividends.
How to invest in cell tower REITs?
To invest in cell tower REITs, you can open an account with an online investment platform such as eToro.
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