Is it Wise to Retain SBA Communications Stock in Your Portfolio Now?

SBA Communications SBAC is likely to experience a healthy growth momentum with extensive infrastructure assets, driven by increased consumer demand and the adoption of data-driven mobile devices and applications. The long-term leases with its tenants assure stable revenues. Also, portfolio expansion moves are encouraging.However, customer concentration and consolidation in the wireless industry are key near-term concerns. A leveraged balance sheet is likely to keep its financial obligations elevated.What’s Aiding SBAC?The advancement in mobile technology, such as 5G networks, and the proliferation of bandwidth-intensive applications have propelled growth in mobile data usage globally. With increasing smartphone adoption, greater broadband demand and plans for 5G service worldwide, wireless service providers and carriers have been deploying additional equipment for existing networks to enhance network coverage and capacity. SBA Communications’ portfolio of extensive infrastructure assets is well-poised to capitalize on this upbeat trend.SBAC has a resilient and stable site-leasing business model. The company generates most of its revenues from long-term (typically five to 10 years) tower leases that have built-in rent escalators. With high operating margins, its tower-leasing business remains attractive.SBAC continues to expand its tower portfolio and seeks new growth opportunities through expansion in domestic and international markets. In the second quarter, SBA Communications acquired 4,329 communication sites, including Milicom’s 4,323 sites, for a total cash consideration of $562.9 million. The company also built 94 towers during this period. Such portfolio expansion efforts will position SBA Communications to leverage secular trends in mobile data usage and wireless spending growth across the globe.SBA Communications’ dividend hikes and share buybacks demonstrate its commitment to driving shareholder value and superior capital-distribution ability. The company has increased its dividend five times in the last five years, and its five-year annualized dividend growth rate is 18.52%. Given SBA Communications’ solid operating platform, the dividend distribution is expected to be sustainable over the long run.Following the second quarter of 2025, SBA Communications repurchased 182,000 shares of its Class A common stock for an aggregate amount of $41.4 million under its $1.5 billion stock repurchase plan. Such efforts boost shareholders’ confidence in the stock.What’s Hurting SBAC?The company has a high customer concentration, with T-Mobile TMUS, AT&T Wireless T and Verizon Wireless VZ accounting for the majority of its domestic site-leasing revenues. In the second quarter of 2025, T-Mobile, AT&T and Verizon accounted for 36.7%, 30.5% and 20.2%, respectively, of SBAC’s domestic site-leasing revenues.Therefore, the loss of any of these customers, like TMUS, T and VZ, consolidation among them or a reduction in network spending might hurt the company’s top line significantly.SBA Communications has a substantially leveraged balance sheet, with $12.6 billion of total debt and a net debt to the annualized adjusted EBITDA leverage of 6.5X as of the end of the second quarter of 2025. The high amount of debt is likely to keep SBA Communications’ financial obligations elevated.#1 Semiconductor Stock to Buy (Not NVDA)The incredible demand for data is fueling the market's next digital gold rush. As data centers continue to be built and constantly upgraded, the companies that provide the hardware for these behemoths will become the NVIDIAs of tomorrow.One under-the-radar chipmaker is uniquely positioned to take advantage of the next growth stage of this market. It specializes in semiconductor products that titans like NVIDIA don't build. It's just beginning to enter the spotlight, which is exactly where you want to be.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AT&T Inc. (T): Free Stock Analysis Report Verizon Communications Inc. (VZ): Free Stock Analysis Report SBA Communications Corporation (SBAC): Free Stock Analysis Report T-Mobile US, Inc. (TMUS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks