High dividend, beaten-down stock. Is this REIT cheap for a good reason?
The stock has fallen by nearly a third from its yearly high and by more than half from its record peak at the end of 2021. Yet the company keeps paying shareholders over 5.5% a year without having to beg for equity capital or rein in operations. For a dividend investor, that sounds like a dream. For anyone who has followed the REIT sector for more than a few years, it’s more of a warning sign, because a high yield more often means the market is counting on declining, not growing, cash flows.
Key points
The dividend was cut by 32% in 2025 to $4.25 per share annually, but the payout ratio on standard AFFO remains around 91% to 94% even after the cut.
AFFO per share grew 11% year over year in the second quarter of 2026, while tower leasing revenue fell 4.1% in the same period.
The sale of the Fiber and Small Cells division enabled the company to repay over $7.2 billion of debt, bringing net leverage down to 6.3× EBITDA, right inside the targeted investment-grade band.
Forward P/AFFO stands at 16.5×, so higher than peer American Tower at 15.6× and SBA Communications at 15.1×, despite greater customer concentration.
An in‑house AFFO model points to a base‑case value around $67 per share, which is roughly 12% below the current market price of $75.6.
We are talking about an industry that most people ignore, even though not a single phone call or data transmission would work without it. The US telecom‑tower market is effectively controlled by three companies. While two of them have stayed true to a diversified, internationally spread portfolio, the third has undergone a transformation over the past three years that telecom infrastructure hasn’t seen in recent memory: it sold a key division for $8.5 billion, cut its dividend by 32%, and cycled through three CEOs in under two years.
After shedding unnecessary baggage, is the company finally a leaner, higher‑quality business? Or is the stock decline a reasonable response to structurally slower growth and higher risk that the high dividend is merely masking?