SBAC vs AMT: Why SBAC's Lower Multiple and 5G Potential Make It a Better Investment
SBAC and AMT, two major players in the telecom industry, face similar challenges but present different investment prospects. While both have struggled with flat or declining revenues due to industry consolidation, SBAC's lower multiple and investment-grade rating make it relatively more attractive.
Historically, SBAC trades at a lower multiple (15.5X) than AMT (17.75X), which is unusual given its past performance. However, SBAC's multiple is now close to its lowest point, and it has secured an investment-grade rating. For AMT, a buy and hold strategy would require a stock price of at least $180, while SBAC's strategy could yield a return profile of $16.00 if the stock holds above $190.00 with covered calls for March 2026.
Both companies have faced revenue growth challenges that are not expected to return in the near future. However, SBAC's potential in 5G deployments by 2027 makes a buy and hold strategy attractive for those with a long timeline. Covered calls can significantly improve the risk-reward for both companies, but SBAC's lower multiple and investment-grade rating make it more appealing. Despite these factors, both companies are expected to generate very low AFFO growth over the next year or two.
While SBAC and AMT share similar revenue growth challenges, SBAC's lower multiple, investment-grade rating, and 5G deployment potential make it a more attractive investment option. Both companies can benefit from covered calls to improve risk-reward profiles, but SBAC's current fundamentals give it an edge.
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