Stock Story: Crown Castle

Crown Castle offers an attractive combination of predictable cash flows, structural growth and a 6.2% 2027 AFFO yield despite recent market weakness.

• Crown Castle operates approximately 39,700 tower and rooftop sites in the US, with about 71% located in the country’s top 100 trading areas.
• North American mobile data traffic grew by an average of 25% per year between 2015 and 2025, supporting additional tenants, larger antennas and higher rental income with limited incremental costs.
• Each tower generates approximately US$95,000 per year on average, while long-term contracts include rent escalators of around 3% and largely predictable operating costs.
• The company’s weak performance reflected fibre and small-cell capital allocation, customer losses following the T-Mobile-Sprint merger and DISH’s default, and fears that Starlink could disrupt towers; the fibre business was sold and management replaced in 2025, while most customer churn should be complete in 2026.
• CCI’s shares fell 15% during the second and third quarters of 2026 as the US 10-year yield rose 97 basis points, even though the company increased its FY2026 guidance; its debt is currently 100% fixed-rate.

Takeaway: With revenue expected to grow at least 3%, Magellan estimates a prudent shareholder return of approximately 9% per year at current rates, while acknowledging uncertainty over future interest rates and remaining sceptical that direct-to-device satellites can replace terrestrial towers in high-demand areas.