AMT: What is happening to American Tower’s Dividend?
American Tower (AMT) AMT 0.00%↑ disappointed investors with their dividend decision.
AMT has a strong history of dividend growth. This decision makes them look bad.
The way most income investors think about dividends and the way Wall Street (and many boards of directors) think about dividends is different.
Both approaches have validity. The best process is to consider both points of view.
What Happened?
American Tower declared a dividend for $1.62 per share.
That is tied for the second highest dividend AMT has declared in any quarter.
If AMT didn’t raise the dividend in their prior declaration (a few months ago), everything would be fine. There would be zero issues.
AMT has indicated that they anticipate a relative flat dividend rate for 2024.
2023 Dividend: $6.45
2024 Dividend Rough Guidance: $1.62 * 4 = $6.48.
That’s a really small increase, but it’s fine.
REITs should be prioritizing cash flow for debt repayment over large dividend increases so long as:
The REIT has debt available to be paid off without penalty.
The REIT won’t have too much taxable income.
Disclosure: We are long AMT.