Communications Sales & Leasing,Inc. (NASDAQ: UNIT) and American Tower Corporation (REIT) (NYSE:AMT) are both mid-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, earnings, valuation and risk.

Profitability

This table compares Communications Sales & Leasing,Inc. and American Tower Corporation (REIT)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Communications Sales & Leasing,Inc. -5.41% N/A -1.29%
American Tower Corporation (REIT) 18.58% 16.70% 3.74%

Analyst Recommendations

This is a summary of current ratings for Communications Sales & Leasing,Inc. and American Tower Corporation (REIT), as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Communications Sales & Leasing,Inc. 0 3 6 1 2.80
American Tower Corporation (REIT) 0 0 11 0 3.00

Communications Sales & Leasing,Inc. presently has a consensus target price of $29.88, suggesting a potential upside of 70.71%. American Tower Corporation (REIT) has a consensus target price of $146.80, suggesting a potential upside of 2.18%. Given Communications Sales & Leasing,Inc.’s higher possible upside, equities analysts clearly believe Communications Sales & Leasing,Inc. is more favorable than American Tower Corporation (REIT).

Valuation & Earnings

This table compares Communications Sales & Leasing,Inc. and American Tower Corporation (REIT)’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Communications Sales & Leasing,Inc. $831.65 million 3.69 $681.10 million ($0.32) -54.69
American Tower Corporation (REIT) $6.33 billion 9.74 $3.74 billion $2.49 57.70

American Tower Corporation (REIT) has higher revenue and earnings than Communications Sales & Leasing,Inc.. Communications Sales & Leasing,Inc. is trading at a lower price-to-earnings ratio than American Tower Corporation (REIT), indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Communications Sales & Leasing,Inc. has a beta of 1.16, suggesting that its share price is 16% more volatile than the S&P 500. Comparatively, American Tower Corporation (REIT) has a beta of 0.69, suggesting that its share price is 31% less volatile than the S&P 500.

Insider and Institutional Ownership

68.4% of Communications Sales & Leasing,Inc. shares are owned by institutional investors. Comparatively, 92.1% of American Tower Corporation (REIT) shares are owned by institutional investors. 0.4% of Communications Sales & Leasing,Inc. shares are owned by insiders. Comparatively, 0.9% of American Tower Corporation (REIT) shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Communications Sales & Leasing,Inc. pays an annual dividend of $2.40 per share and has a dividend yield of 13.7%. American Tower Corporation (REIT) pays an annual dividend of $2.64 per share and has a dividend yield of 1.8%. Communications Sales & Leasing,Inc. pays out -750.0% of its earnings in the form of a dividend. American Tower Corporation (REIT) pays out 106.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. American Tower Corporation (REIT) has increased its dividend for 5 consecutive years. Communications Sales & Leasing,Inc. is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

American Tower Corporation (REIT) beats Communications Sales & Leasing,Inc. on 12 of the 17 factors compared between the two stocks.

Communications Sales & Leasing,Inc. Company Profile

Uniti Group Inc., formerly Communications Sales & Leasing, Inc., is an internally managed real estate investment trust engaged in the acquisition and construction of infrastructure in the communications industry. The Company focuses on acquiring and constructing fiber optic broadband networks, wireless communications towers, copper and coaxial broadband networks and data centers. It operates in four segments: Leasing, Fiber Infrastructure, Towers and Consumer Competitive Local Exchange Carrier (Consumer CLEC). The Leasing segment includes Uniti Leasing. The Fiber Infrastructure segment includes Uniti Fiber business. The Towers segment includes Uniti Towers and its ground lease investments. The Consumer CLEC segment includes Talk America. As of July 3, 2017, the Company and its subsidiaries owned approximately 88,100 fiber network route miles, representing approximately 4.8 million fiber strand miles and approximately 231,900 route miles of copper cable lines across 32 states.

American Tower Corporation (REIT) Company Profile

American Tower Corporation (ATC) is a holding company. The Company operates as a real estate investment trust (REIT), which owns, operates and develops multitenant communications real estate. ATC’s segments include U.S. property, Asia property, EMEA property, Latin America property, Services and Other. Its primary business is property operations, which include the leasing of space on communications sites to wireless service providers, radio and television broadcast companies, wireless data providers, government agencies and municipalities, and tenants in various other industries. Its U.S. property segment includes operations in the United States. Its Asia property segment includes operations in India. The EMEA property segment includes operations in Germany, Ghana, Nigeria, South Africa and Uganda. The Latin America property segment includes operations in Brazil, Chile, Colombia, Costa Rica, Mexico and Peru. Its services segment offers tower-related services in the United States.

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