Crown Castle: Insiders Call Up Cell Tower Operator

Our high-dividend stocks just keep pressing higher — and I’m still finding attractive opportunities out there. One of them is Crown Castle International (CCI), observes Mark Skousen, editor of High-Income Alert.

Crown Castle is based in Houston and leases more than 40,000 cell towers, supported by 75,000 route miles of fiber helping small cells, to wireless communications companies like AT&T and Verizon.

Of course, we don’t just go online anymore. We exist there. Our computers, tablets and smart phones are all connected to the internet. And soon, traffic lights, household appliances and self-driving cars will be, too.

Crown Castle, with its towers, small cells and fiber, makes these connections possible. And it will become even more essential with the advent of 5G, the next generation of wireless connectivity. 5G is capable of delivering data at up to 1 gigabyte per second. That’s 20 times faster than current networks.

The service, rolling out in select cities across the United States this year, will drastically increase the number of devices that can be simultaneously managed on a wireless network.

As carriers transition to the 5G standard, as they all will eventually, Crown Castle International will be a huge beneficiary. Sales and earnings are set to ratchet sharply higher in the weeks and months ahead.

Not that business is shabby now. In the recently reported second quarter, earnings per share soared 37% on an 11% increase in sales. The company enjoys a 28% operating margin. And annual revenue tops $5.7 billion.

However, insiders are signaling that the best is yet to come. In April, chairman Landis Martin made the company’s biggest insider buy in over two years — by purchasing 18,350 shares at an average price of $123.13 for an investment of $2.26 million.

He was back at the trough last week with another major buy: 16,300 shares at an average price of $127.28, an investment of $2.07 million.

He now owns more than 130,000 shares worth over $16.9 million at the current market. That’s what I call a high degree of conviction. There is plenty of trading potential here. But there’s also a 3.5% dividend yield.

Crown Castle is organized as a real estate investment trust (REIT). So, it will pay out at least 90% of net income to shareholders each quarter.

In short, this is a high-quality play with sound fundamentals, excellent growth prospects and telltale insider buying. So, pick up Crown Castle International at market. And place a sell stop at $105 for protection.

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