AMT & TMUS: Two communication stocks to watch

May 29, 2023 02:47 AM PDT | By Akanksha Vashisht
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  • The telecom sector includes well-established corporations that may seem attractive to investors as they offer dividend income.
  • American Tower Corp., a cell towers operating company, reported total revenue of US$ 2.767 billion for Q1 2023.
  • For Q1 2023, T-Mobile registered net account additions of 287,000 and net customer additions of 1.3 million in its postpaid segment.

The telecommunications sector is host to well-established corporations as well as growing corporations. Some of the largest companies across nations are their respective telecommunication providers. The operations of companies in this sector include internet access, phone network provision, television access and the fundamental infrastructure required to provide them.

These companies may seem attractive to investors as they may sometimes offer a dividend income. Since telecom companies are industry leaders, they are well-established companies that have a stable revenue stream.

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With the introduction of 5G technology over the past few years, these telecommunication companies have once again been brought to the forefront. On that note, here are two such telecommunication stocks to watch – AMT & TMUS. Let us examine them more closely:

American Tower Corp. (NYSE: AMT)

American Tower Corp. operates cell towers across the globe including US, Europe, and the Middle East. Unlike other mobile service providers, American Tower Corp. is not a mobile carrier. The company owns and operates towers that are accessed by mobile service provider companies.

For Q1 2023, American Tower reported total revenue of US$ 2.767 billion, while the property revenue was US$ 2.715 billion. However, the tower operator also reported a fall in net income of US$ 315 million. The net income to common stockholders was also lower at US$ 336 million.

Image source: ©2023 Kalkine®; Data source: Company Reports

The company reported an increase in its dividend which grew 11% year over year during Q1 2023.  American Tower offers a quarterly dividend of US$ 1.57.

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T-Mobile US Inc. (NASDAQ: TMUS)

The company was formed after the merging of Deutsche Telekom’s T-Mobile US segment with MetroPCS in 2013. T-Mobile has expanded its reach across the world, focusing heavily on its marketing efforts. These efforts have made the company stand on par with some of its large competitors in the segment.

For Q1 2023, T-Mobile reported net account additions of 287,000 and net customer additions of 1.3 million in its postpaid segment. This contributed to a net income increase of 172% year-on-year to US$ 1.9 billion in Q1 2023. The total services revenue rose 3% year-on-year to US$ 15.5 billion for the quarter.

Image source: ©2023 Kalkine®; Data source: Company Reports

T-Mobile’s adjusted free cash flow increased 46% year-on-year to US$ 2.4 billion in Q1 2023. Meanwhile, its adjusted EBITDA for Q1 2023 was US$ 7.199 billion.


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