February 12, 2019 | By John Whitefoot, BA | Profit Confidential |
“Crown Castle: The Largest Provider of Shared U.S. Communications Infrastructure”
“Bill Gates, the second-wealthiest person in the world, has a net worth of around $90.0 billion. Along with his wife, Melinda Gates, the pair are the eponymous names behind the Bill and Melinda Gates Foundation, the largest private foundation in the United States.
Like all philanthropic organizations, its goal is to generate wealth and share it. To do this, Bill and Melinda Gates invest in organizations that they believe will provide them with the greatest long-term gains. They have seen the future, and it is 5G.
The bread and butter of that technological revolution is Crown Castle International Corp (NYSE:CCI), a real estate investment trust (REIT) that is the largest provider of shared communication (cellular) infrastructure in the U.S.
Bill Gates Owns 5.3 Million Shares in Crown Castle
According to the U.S. Securities and Exchange Commission filings of the Bill and Melinda Gates Foundation, the pair owns 5.3 million shares of Crown Castle International Corp. (Source: “Bill and Melinda Gates Foundation Form 13-F,” U.S. Securities and Exchange Commission, last accessed February 11, 2019.)
Why do Melinda and Bill Gates own so many shares of Crown Castle International Corp (valued at $627.5 million at the time of this writing)? It all has to do with Crown Castle’s communication infrastructure and the rollout of 5G technology.
|Crown Castle International Corp Financials|
|Market Cap||$49.1 billion|
|Annual Dividend Yield||3.8%|
(Source: “Crown Castle International Corp. (REIT) (CCI),” Yahoo! Finance, last accessed February 11, 2019.)
Crown Castle International Corp is a real estate investment trust that owns, operates, and leases more than 40,000 cell towers and roughly 65,000 route miles of fiber in every major American market. The company also has approximately 65,000 on-air or under-contract small cell nodes. (Source: “Our Infrastructure,” Crown Castle International Corp, last accessed February 11, 2019.)
Small cell networks are a series of small nodes that are often attached to existing infrastructure, like utility poles, signposts, or streetlights. In some cases, Crown Castle also attaches its small cells to the sides and tops of buildings.
Small cells will play a crucial role in meeting the growing demands of wireless data and increased bandwidth that new technologies like 5G require.
Crown Castle leases its towers to wireless carriers, like Verizon Communications Inc. (NYSE:VZ), AT&T Inc.(NYSE:T), and T-Mobile Us Inc (NASDAQ:TMUS). This helps provide Crown Castle with substantial recurring revenues and excellent free cash flow.
Because of the high barrier to entry, it also means Crown Castle has little competition. That has allowed the company to provide investors with long-term capital appreciation and a frothy dividend yield of 3.8%.
Chart courtesy of StockCharts.com
Crown Castle’s share price has been on a roll in 2019. The company was actually doing very well in 2018, but then its momentum was upended by the market’s broad-based sell-off in October and the December meltdown.
Since bottoming on December 26 at $103.21, CCI stock has been heading higher. In fact, Crown Castle’s share price has surpassed its pre-December highs, hitting a new 52-week high of $119.43 on February 6.
Since December 26, Crown Castle’s share price has advanced approximately 14.5%. Since the start of 2019, the company’s share price has increased more than 10%. Part of that growth in 2019 can be attributed to the company’s solid year-end results.”