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  • Writer's pictureAlex Pettee, CFA

Cell Tower REITs: Tech Trouble

  • Tech Trouble? Cell Tower REITs outperformed the REIT Index for the sixth-straight-year in 2020, but have dipped nearly 20% over the last quarter amid the sharp vaccine-driven REIT sector rotation.

  • 5G Is Here. Apple's successful iPhone 12 launch represents the true "arrival" of 5G, the much-anticipated next-generation mobile network will reach its full potential as post-pandemic mobility rates normalize.

  • All three cell tower REITs boosted their dividends in 2020. Cell Tower REITs have recorded annual dividend growth averaging 26% over the past 5 years, the tops among major REIT sectors.

  • Cell Tower REITs continue to benefit from highly favorable competitive positioning within the telecommunication sector and, despite the recent sell-off, little has changed over the past quarter to alter that outlook.

  • The pull-back appears to be a long-awaited buying opportunity. Despite sector-leading growth rates, cell tower REITs - along with many other "essential" REITs in the housing, technology, and logistics sectors - trade near historically low relative valuations to the REIT average.

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Disclosure: A complete list of holdings and Real Estate and Housing Index definitions and holdings are available at Hoya Capital Real Estate advises an Exchange Traded Fund listed on the NYSE. Hoya Capital is long all components in the Hoya Capital Housing 100 Index.

Additional Disclosure: It is not possible to invest directly in an index. Index performance cited in this commentary does not reflect the performance of any fund or other account managed or serviced by Hoya Capital Real Estate. Data quoted represents past performance, which is no guarantee of future results. Information presented is believed to be factual and up-to-date, but we do not guarantee its accuracy.

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