A Beaten-Down REIT Is Ready For Its Turnaround
About a year ago, I wrote an article discussing a few popular dividend stocks people should sell.
One of them has dropped over 25% since I recommended selling!
Hopefully, everyone listened.
But the lower stock price means the company deserves another look.
I’m talking about Crown Castle Inc. (ticker: CCI), a cell tower REIT.
Crown Castle owns cell towers and equipment all over the US.
Major cell carriers rent the towers to ensure their customers have service wherever they need it.
Crown Castle has been hammered since its peak at the end of 2021.
Its stock price is down over 50%!
It gets worse, though.
Crown Castle cut its dividend by over 30% in 2025.
It was the main reason I recommended selling the stock.
But now things look very different for Crown Castle.
First, the lower stock price means we’re getting the stock incredibly cheap.
Its price-to-funds-from-operations ratio (P/FFO), which is the preferred valuation ratio for REITs, is only 12.6x and near an all-time low.
Its P/FFO ratio is in line with its peers, which we’ll get back to in a minute.
Second, Crown Castle finished selling off its fiber and small cell business back in May 2026.
The fiber and small cell businesses were taking an enormous amount of investment from Crown Castle, and the company wasn’t making enough to continue.
Now, Crown Castle only owns and leases cell towers to the big carriers like Verizon, AT&T, and T-Mobile.
It’s a streamlined business with fewer investment needs and more predictable cash flows.
It sounds better, but there’s a downside.
Cell carriers were spending billions expanding their networks for 5G, but most of the work finished in 2022.
Crown Castle now finds itself in a market with very few growth prospects, especially in the short term.
But in the long term, Crown Castle is well-positioned.
5G is the current technology for mobile networks, but it won’t be the last.
6G is being developed and is expected to be released in the next 5 years.
All of Crown Castle’s customers will need to update their towers and expand their coverage for the new 6G technology, which means more money to Crown Castle.
In the meantime, Crown Castle’s stock price will still be choppy.
But its dividend yield of 5.6% is one of the highest among REITs.
Plus, with Crown Castle selling its fiber and small cell business, there isn’t as much downside to the stock.
From the sale, Crown Castle paid down over $6 billion in debt and converted all of its remaining debt to fixed-rate debt.
So, Crown Castle isn’t as exposed to interest rates relative to other REITs.
Lower debt also reduces the amount of interest it pays, which means more income for Crown Castle and a safer dividend for its investors.
Crown Castle’s stock price drop looks scary.
But go look at the P/FFO chart from earlier.
Crown Castle used to be in a high-growth sector with fiber and small cell.
Now, the company has pivoted to a more stable, but lower-growth, sector of cell towers.
Investors aren’t going to pay a premium for a slower-growing company, so the stock price crashed.
However, since Crown Castle’s current P/FFO ratio is in line with its peers, its stock price should be more stable going forward.
And don’t forget its amazing 5.6% dividend yield.
Have you ever bought a dividend stock following a big drop in its stock price?
It’s risky… but the high dividend yields can be tough to pass up.
Michael Jennings
Dividend Stocks Research
Category: Dividend Stocks To Buy?, Dividend Yield
