Month: July 2023

Have You Cemented Your Stock Portfolio with Cement Stocks?

by Fred Fuld III

The cement industry is a major contributor to the global economy, with a market size of over $326 billion. The industry is expected to grow at a CAGR of 5.1% from 2022 to 2029, driven by demand from infrastructure projects and urbanization.

Infrastructure projects, such as roads, bridges, and dams, are major consumers of cement. As developing countries invest in their infrastructure, the demand for cement is expected to grow. In addition, urbanization is also driving the demand for cement. As more people move to cities, there is a need for more housing and commercial buildings. Cement is a key ingredient in these structures.

The growth of the cement industry is not without its challenges. One challenge is the environmental impact of cement production. Cement manufacturing is a major source of carbon dioxide emissions. The industry is working to reduce its environmental impact, but this is a challenge.

Another challenge facing the cement industry is the increasing competition from emerging markets. China is the world’s largest producer of cement, but its growth is slowing. Other countries, such as India and Vietnam, are seeing rapid growth in their cement industries. This competition is putting pressure on prices and margins in the global cement market.

Despite these challenges, the cement industry is expected to continue to grow in the coming years. The demand for infrastructure and urbanization will continue to drive growth. The industry is also working to reduce its environmental impact, which will help to sustain its growth.

Here are some additional details about the factors driving growth in the cement industry:

  • Infrastructure projects: Governments around the world are investing heavily in infrastructure projects, such as roads, bridges, and dams. This is creating a significant demand for cement.
  • Urbanization: The world’s population is becoming increasingly urbanized. This is leading to a need for more housing and commercial buildings, which also require cement.
  • Economic growth: In many developing countries, economic growth is leading to an increase in disposable income. This is creating a demand for new homes and other structures, which also requires cement.
  • Increasing demand for sustainable construction materials: There is a growing demand for sustainable construction materials, such as cement made from recycled materials. This is creating new opportunities for the cement industry.

Vulcan Materials Company (VMC), which is traded on the New York Stock Exchange, is a producer of construction aggregates, primarily crushed stone, sand and gravel, and a major producer of aggregates-based construction materials including asphalt and ready-mixed concrete. The company’s products are used in nearly all forms of construction, including roads, bridges, buildings, and airports.

Vulcan Materials is the largest producer of construction aggregates in the United States, with operations in 29 states. The company also has operations in Canada and Mexico. Vulcan Materials is headquartered in Birmingham, Alabama.

The company’s stock is traded on the New York Stock Exchange (NYSE) under the ticker symbol “VMC.”

Vulcan Materials is a profitable company with a strong financial position. The company has a long history of growth and is well-positioned for future growth.

Here are some of the company’s strengths:

  • Strong market position: Vulcan Materials is the largest producer of construction aggregates in the United States. This gives the company a significant advantage in terms of market share and pricing power.
  • Diversified product portfolio: Vulcan Materials produces a wide range of construction materials, which helps to reduce its reliance on any one product or market.
  • Strong financial position: Vulcan Materials has a strong balance sheet and generates a lot of cash flow. This gives the company the financial resources to invest in growth and acquisitions.

Here are some of the company’s challenges:

  • Cyclical industry: The construction industry is cyclical, which means that demand for Vulcan Materials’ products can fluctuate.
  • Environmental regulations: The construction industry is heavily regulated, which can increase costs and delay projects.
  • Competition: Vulcan Materials faces competition from other producers of construction aggregates, as well as from companies that produce alternative construction materials.

Overall, Vulcan Materials is a strong company with a bright future. The company has a dominant market position, a diversified product portfolio, and a strong financial position. However, the company faces some challenges, such as the cyclical nature of the construction industry and the increasing regulatory burden.

The $29,5 billion market capitalization company has a trailing price to earnings ratio of 48 and a forward P/E ratio of 29. Quarterly earnings growth year-over-year were 31% on a revenue growth of 7%. Earnings per share growth for next year is expected to be 19.3%. The stock pays a dividend of 0.76%.

Cemex (CX) is a global building materials company with headquarters in Monterrey, Mexico. It is one of the largest cement companies in the world, with operations in over 50 countries. Cemex produces a wide range of building materials, including cement, ready-mix concrete, aggregates, and asphalt.

Cemex’s products are used in a wide variety of construction projects, including roads, bridges, buildings, and infrastructure projects. The company’s customers include governments, contractors, and individual consumers.

Here are some of Cemex’s strengths:

  • Strong market position: Cemex is one of the largest cement companies in the world, with operations in over 50 countries. This gives the company a significant advantage in terms of market share and pricing power.
  • Diversified product portfolio: Cemex produces a wide range of building materials, which helps to reduce its reliance on any one product or market.
  • Strong financial position: Cemex has a strong balance sheet and generates a lot of cash flow. This gives the company the financial resources to invest in growth and acquisitions.
  • Global reach: Cemex has operations in over 50 countries, which gives the company a global presence and access to new markets.

Here are some of Cemex’s challenges:

  • Cyclical industry: The construction industry is cyclical, which means that demand for Cemex’s products can fluctuate.
  • Environmental regulations: The construction industry is heavily regulated, which can increase costs and delay projects.
  • Competition: Cemex faces competition from other cement companies, as well as from companies that produce alternative building materials.

Overall, Cemex is a strong company with a bright future. The company has a dominant market position, a diversified product portfolio, and a strong financial position.

This $10.7 billion company trades at 18 times trailing earnings and 190 times forward earnings. Quarterly earnings growth year-over-year were 21% on a revenue growth of 8.4%. Earnings per share growth for next year is expected to be 18.9%. The company does not pay a dividend.

Eagle Materials Inc. (EXP) is a leading manufacturer of basic construction materials in the United States. The company produces cement, gypsum wallboard, recycled paperboard, and concrete and aggregates. Its products are used in residential, commercial, industrial, infrastructure, and energy applications.

Eagle Materials was founded in 1963 as a division of Centex Construction Company. The company became an independent public company in 2004. Eagle Materials is headquartered in Dallas, Texas, and has operations in 11 states.

Eagle Materials is a profitable company with a strong financial position. The company has a long history of growth and is well-positioned for future growth.

Here are some of the company’s strengths:

  • Strong market position: Eagle Materials is a leading manufacturer of basic construction materials in the United States. This gives the company a significant advantage in terms of market share and pricing power.
  • Diversified product portfolio: Eagle Materials produces a wide range of construction materials, which helps to reduce its reliance on any one product or market.
  • Strong financial position: Eagle Materials has a strong balance sheet and generates a lot of cash flow. This gives the company the financial resources to invest in growth and acquisitions.
  • Focus on innovation: Eagle Materials is constantly investing in new technologies and products. This helps the company to stay ahead of the competition and meet the needs of its customers.

Here are some of the company’s challenges:

  • Cyclical industry: The construction industry is cyclical, which means that demand for Eagle Materials’ products can fluctuate.
  • Environmental regulations: The construction industry is heavily regulated, which can increase costs and delay projects.
  • Competition: Eagle Materials faces competition from other manufacturers of construction materials, as well as from companies that produce alternative building materials.

EXP has a trailing P/E of 15 and a forward P/E of 13. Earnings per share growth for next year is expected to be 36.2%. The company pays a dividend of 0.54%.

Overall, the cement industry is expected to continue to grow in the coming years. The demand for infrastructure and urbanization will continue to drive growth. Maybe one of these stocks could be the foundation for your portfolio.

Disclosure: Author did not own any of the above at the time the article was written.

Movie Review: BlackBerry

by Fred Fuld III

Are you looking for a great movie to watch over the long weekend? Check out BlackBerry, currently available as an Amazon Prime Video.

Does anyone remember the BlackBerry smartphone? Do young people even know what a BlackBerry is?

The riveting true story of BlackBerry takes us on a whirlwind ride through the ruthlessly competitive forces of Silicon Valley. With excellent pacing and a well-written screenplay, the two-hour runtime flies by. Jay Baruchel and Glenn Howerton deliver outstanding performances, supported by a talented cast. The cinematography and score are top-notch, immersing us in the captivating narrative.

BlackBerry tells the tale of Mike Lazaridis (Jay Baruchel), the genius behind the world’s first smartphone. Joined by Jim Balsillie (Glenn Howerton) as Co-CEO, they navigate the highs and lows of the company’s journey. The film unveils surprising behind-the-scenes details that kept me engaged throughout.

Adapted from the novel by Matthew Miller and directed by Matt Johnson, the stellar dialogue holds our attention, even in quieter moments. It offers a fascinating exploration of the cutthroat business world. Baruchel and Howerton deliver career-defining performances, especially Howerton.

BlackBerry impresses with its editing, direction, and music choices. As a Canadian film starring Canadian actors, it deserves recognition. The film strikes a balance between serious storytelling and clever satire, making it even more enjoyable. I cannot recommend BlackBerry enough – a must-watch

Are Cell Tower Stocks Calling? Yields up to 13%

by Fred Fuld III

The cell tower industry is currently in a state of growth, driven by the increasing demand for mobile data and the rollout of 5G networks. The global cell tower market is expected to reach $120 billion by 2025, up from $80 billion in 2020.

The growth of the cell tower industry is being driven by a number of factors, including:

  • The increasing demand for mobile data: As more and more people use their smartphones and tablets to stream video, download music, and play games, the demand for mobile data is growing rapidly. This is putting a strain on existing cellular networks, and cell towers are needed to increase capacity and improve coverage.
  • The rollout of 5G networks: 5G is the next generation of cellular technology, and it promises to deliver much faster speeds and lower latency than 4G. This will enable new applications such as virtual reality, augmented reality, and self-driving cars, which will all require a significant amount of bandwidth.
  • The increasing popularity of small cells: Small cells are a type of cell tower that is much smaller and less visible than traditional cell towers. They can be deployed in a variety of locations, such as on streetlights, utility poles, and buildings. This makes them ideal for areas with high demand for mobile data, such as city centers and sports stadiums.

The Future of Cell Towers

The future prospects for the cell tower industry are very positive. The demand for mobile data is expected to continue to grow, and the rollout of 5G networks will further accelerate this growth. In addition, the increasing popularity of small cells will create new opportunities for the cell tower industry.

Overall, the cell tower industry is a good investment for the future. It is a stable and growing industry with a bright future.

Here are some additional reasons why cell towers are a good investment:

  • They are in high demand. The demand for cell towers is growing rapidly, as more and more people use their smartphones and tablets to connect to the internet.
  • They are relatively low-cost. The cost of building and maintaining a cell tower is relatively low, compared to other types of infrastructure.
  • They have a long lifespan. Cell towers can last for many years, making them a sound investment.
  • They provide a steady stream of income. Cell tower operators typically lease space on their towers to telecommunications companies, which provides a steady stream of income

If you are looking for cell tower stocks, there are a few options to consider, primarily those that are structured as real estate investment trusts [REITs] .

American Tower

American Tower Corporation (AMT) is a leading global real estate investment trust focused on owning, operating, and leasing wireless communications infrastructure. Established in 1995, the company has become one of the key players in the cell tower industry, providing essential infrastructure for wireless communication networks worldwide.

Key aspects of American Tower Corporation include:

  1. Global Presence: ATC has a significant global presence, with operations in various countries across North America, Latin America, Europe, Africa, and Asia. They own and operate a vast portfolio of cell towers and other communication infrastructure assets in these regions.
  2. Cell Tower Ownership: The core of ATC’s business revolves around owning and operating cell towers. These towers are equipped with antennas and other equipment necessary for transmitting and receiving wireless signals from mobile devices.
  3. Diverse Portfolio: American Tower’s portfolio includes a wide range of wireless infrastructure assets, including macro cell towers, rooftop installations, and distributed antenna systems (DAS). This diversity enables them to cater to the specific needs of different wireless carriers and provide coverage in various environments.
  4. Wireless Carrier Leasing: The company primarily generates revenue by leasing space on its towers to wireless carriers, telecommunications companies, and other wireless service providers. These companies use the infrastructure to provide cellular and data services to their customers.
  5. Support for Emerging Technologies: ATC has been actively involved in supporting the deployment of emerging technologies like 5G. As 5G networks continue to roll out globally, the demand for cell towers and infrastructure is expected to grow, benefiting companies like American Tower.
  6. Financial Performance: American Tower Corporation has experienced strong financial performance over the years, driven by the increasing demand for wireless communication and the expansion of mobile networks. The company’s revenue is derived from long-term lease agreements with its tenants, providing a stable source of income.
  7. Sustainable Growth: Given the ongoing growth in mobile data consumption and the constant need for improved wireless connectivity, American Tower is positioned for sustainable growth in the long term. The company continues to invest in expanding its infrastructure and exploring opportunities in emerging markets.

American Tower Corporation’s role in the cell tower industry is crucial, as it provides the backbone infrastructure that supports wireless communication, enabling people around the world to stay connected and access mobile services. With its strong market position, global presence, and focus on emerging technologies, ATC continues to play a significant role in shaping the future of wireless communication networks.

The stock, with a market cap of $89.9 billion, trades at 69 times trailing earnings and 35 times forward earnings. Long term annual growth estimate for the next five years is 10.48%. It pays an annual dividend yield of 3.48%.

Crown Castle

Crown Castle International Corp. (CCI) is a leading real estate investment trust specializing in the ownership, operation, and leasing of wireless communications infrastructure, with a particular focus on cell towers. Here is a profile of Crown Castle, highlighting its involvement in the cell tower industry:

  1. Cell Tower Ownership: Crown Castle owns and operates a vast portfolio of cell towers across the United States. These towers are strategically located in urban areas, suburban regions, and rural locations to provide comprehensive wireless coverage to a wide range of customers.
  2. Macro Cell Towers: The company’s primary focus is on macro cell towers, which are tall structures equipped with antennas and other equipment necessary for transmitting and receiving wireless signals. These towers are designed to support multiple wireless carriers and their customers simultaneously.
  3. Tower Infrastructure Services: Crown Castle provides essential infrastructure services to wireless carriers, telecommunications companies, and other wireless service providers. The company leases space on its towers, allowing tenants to install their antennas and equipment to enhance their network coverage and capacity.
  4. Small Cell Networks: In addition to macro cell towers, Crown Castle also operates and deploys small cell networks. Small cells are lower-power wireless access points that complement macro towers, providing increased capacity and coverage in densely populated areas such as urban centers.
  5. Fiber Optic Infrastructure: Crown Castle has expanded its operations into fiber optic infrastructure to support the increasing demand for high-speed data transmission. The company owns and operates an extensive fiber network, connecting its cell towers and providing backhaul connectivity to wireless carriers.
  6. National Presence: Crown Castle’s portfolio covers a broad geographic footprint across the United States. The company’s extensive network of cell towers and fiber infrastructure enables it to provide comprehensive wireless coverage and support the deployment of new technologies, including 5G.
  7. Wireless Carrier Relationships: Crown Castle has established long-term relationships with major wireless carriers, including Verizon, AT&T, and T-Mobile. These relationships are crucial for leasing space on its towers and driving revenue growth.
  8. Site Development Services: Crown Castle offers site development services to support wireless carriers in the process of deploying new cell towers or expanding their existing infrastructure. This includes identifying suitable locations, obtaining necessary permits, and managing the construction and installation process.
  9. Financial Performance: Crown Castle has a strong financial track record, with a steady revenue stream driven by long-term lease agreements with its tenants. The company’s success is attributed to its portfolio of high-quality assets, ongoing investment in infrastructure expansion, and reliable cash flow generation.
  10. Commitment to Innovation: Crown Castle is actively involved in supporting the evolution of wireless communication technologies. The company embraces innovation and invests in research and development to meet the changing needs of wireless carriers and consumers.

Crown Castle’s focus on owning and operating cell towers, along with its investment in fiber optic infrastructure, positions it as a key player in the telecommunications industry. With its extensive network, national presence, and commitment to innovation, Crown Castle continues to play a critical role in enabling seamless wireless communication and supporting the growth of mobile networks in the United States.

The stock, which has a market cap of $49 billion, has a trailing price to earnings ratio of 30 and a forward P/E of 33. Earnings per share growth this year was 44.6%, however, on a quarterly basis, earnings were down slightly at -0.7%. The company pays a generous yield of 5.5%.

SBA Communications

SBA Communications Corporation (SBAC) is a leading independent owner and operator of wireless communications infrastructure, with a particular emphasis on cell towers. Here is a profile of SBA Communications, highlighting its involvement in the cell tower industry:

  1. Cell Tower Ownership: SBA Communications owns and operates a substantial portfolio of cell towers primarily in the United States. These towers are strategically located across urban, suburban, and rural areas to provide wireless coverage to a diverse range of customers, including wireless carriers and other telecommunications companies.
  2. Macro Cell Towers: The company focuses on macro cell towers, which are tall structures equipped with antennas and equipment to transmit and receive wireless signals. These towers support multiple wireless carriers and their customers, enabling them to deliver voice, data, and other wireless services.
  3. Tower Leasing and Colocation: SBA Communications generates revenue by leasing space on its towers to wireless carriers and other service providers. Tenants can install their antennas and equipment on these towers, leveraging the infrastructure to expand their network coverage and capacity. SBA Communications also facilitates colocation, allowing multiple tenants to share a single tower.
  4. Diverse Tower Portfolio: SBA Communications owns towers of various types, including freestanding towers, rooftops, and other structures suitable for wireless communication infrastructure. This diversity enables the company to meet the specific requirements of different tenants and provide coverage in various environments.
  5. Geographic Reach: SBA Communications has a strong presence not only in the United States but also in international markets. The company’s tower portfolio extends across North, Central, and South America, providing wireless infrastructure solutions to customers in multiple countries.
  6. Site Development and Services: SBA Communications offers site development services to support wireless carriers in their network expansion efforts. This includes identifying suitable locations, obtaining permits, and managing tower construction and installation. The company also provides maintenance and upgrade services to ensure optimal tower performance.
  7. Financial Performance: SBA Communications has demonstrated consistent financial growth, driven by its extensive tower portfolio and the ongoing demand for wireless communication infrastructure. The company generates revenue through long-term lease agreements with its tenants, providing a stable source of income.
  8. Commitment to Innovation: SBA Communications actively monitors and adapts to evolving industry trends and technological advancements. The company invests in research and development to ensure its towers and infrastructure are equipped to support emerging technologies, such as 5G and future wireless standards.

SBA Communications’ emphasis on owning and operating cell towers, combined with its geographic reach and commitment to innovation, positions it as a significant player in the wireless communications industry. With a diverse tower portfolio and a focus on customer service, SBA Communications continues to play a vital role in facilitating wireless connectivity and supporting the growth of mobile networks.

SBA is a $24.9 billion company, with fairly high P/E ratios, 68 trailing and 40 forward. Earnings per share growth this year was 97.4%, with next year growth anticipated to be 20.9%. The company has no long term debt and pays a yield of 1.47%.

Uniti

Uniti Group Inc. (UNIT) is a real estate investment trust that specializes in owning, acquiring, and operating mission-critical communication infrastructure, including a focus on cell towers. Here is a profile of Uniti Group, emphasizing its involvement in the cell tower industry:

  1. Cell Tower Ownership and Leasing: Uniti Group owns and leases a substantial portfolio of cell towers across the United States. These towers are designed to support wireless communication by providing infrastructure for wireless carriers and other telecommunications companies. Uniti Group generates revenue by leasing space on its towers to tenants, allowing them to install their antennas and equipment.
  2. Tower Portfolio and Diverse Assets: The company’s tower portfolio consists of a mix of macro towers, rooftop installations, and distributed antenna systems (DAS). This diversity enables Uniti Group to cater to different customer requirements and provide coverage in a variety of environments, including urban areas, suburban regions, and rural locations.
  3. Strategic Tower Acquisitions: Uniti Group has been actively engaged in acquiring cell tower assets to expand its portfolio. Through strategic acquisitions, the company aims to enhance its market presence and strengthen its position in the cell tower industry.
  4. Wireless Infrastructure Services: In addition to owning and leasing cell towers, Uniti Group provides a range of infrastructure services to support wireless carriers and their network deployment. These services include site development, tower construction and installation, maintenance, and upgrades.
  5. Fiber Optic Connectivity: Uniti Group has a significant focus on fiber optic connectivity, which complements its cell tower assets. The company’s fiber network connects its towers, providing backhaul connectivity and enabling high-speed data transmission to support the increasing demand for mobile data and emerging technologies.
  6. Customer Relationships: Uniti Group maintains relationships with various wireless carriers, telecommunications companies, and other customers in the wireless industry. These relationships are crucial for leasing space on its towers and providing tailored solutions to meet customer needs.
  7. Geographic Reach: While primarily focused on the United States, Uniti Group has a nationwide presence, with towers located across multiple states. This geographic reach allows the company to offer wireless coverage and infrastructure services to customers in different regions.
  8. Financial Performance: Uniti Group’s financial performance is driven by the recurring revenue generated through long-term lease agreements with its tenants. The stability of these leases provides the company with a predictable income stream.
  9. Commitment to Innovation: Uniti Group recognizes the importance of technological advancements and evolving industry trends. The company actively invests in research and development to stay at the forefront of the rapidly changing wireless communication landscape.

Uniti Group’s focus on cell tower ownership, leasing, and fiber connectivity, combined with its strategic acquisitions and commitment to innovation, positions it as a significant player in the wireless infrastructure industry. Through its diverse tower portfolio and infrastructure services, Uniti Group plays a vital role in supporting wireless connectivity and the growth of mobile networks.

Being one of the smaller companies in the industry, it has a market cap of $1 billion. The stock trades at only 10 times forward earnings. Although earnings per share this year were negative, earnings per share growth for next year are anticipated to increase by over 72%. This $4.62 per share stock is debt free and has 30 cents in cash per share. The dividend yield is a towering 13%.

US Cellular

United States Cellular (USM), the only non-REIT on this list, is a prominent wireless telecommunications provider in the United States, offering cellular service to millions of customers across multiple states. US Cellular operates and utilizes cell towers as a crucial part of its network infrastructure to ensure comprehensive network coverage and connectivity. Here is a profile of US Cellular with emphasis on its involvement with cell towers:

  1. Wireless Service Provider: US Cellular serves as a wireless telecommunications carrier, delivering voice, data, and other wireless services to consumers and businesses. It operates as a regional carrier, primarily focusing on serving customers in specific geographic areas rather than offering nationwide coverage.
  2. Cell Tower Infrastructure: US Cellular owns and operates a substantial number of cell towers strategically positioned throughout its service areas. These cell towers act as essential infrastructure, facilitating the transmission and reception of wireless signals.
  3. Network Coverage and Capacity: The cell towers maintained by US Cellular play a pivotal role in extending network coverage and enhancing capacity for its wireless services. Equipped with antennas and other necessary equipment, these towers transmit voice and data signals to customers’ mobile devices.
  4. Tower Leasing: In addition to its proprietary tower infrastructure, US Cellular may also lease space on third-party cell towers to expand its network coverage in specific locations. By engaging in tower leasing agreements, US Cellular can extend its reach and offer service in areas where it doesn’t have its own towers.
  5. Network Investment: US Cellular continues to invest in expanding and upgrading its network infrastructure, including cell towers, to meet the increasing demand for mobile data and enhance the overall customer experience. These investments involve deploying new technologies such as 5G to improve network speed, capacity, and capabilities.
  6. Site Development and Management: US Cellular actively participates in site development activities, including identifying suitable locations for new tower installations, securing permits, and overseeing the construction and installation process. The company ensures that its tower infrastructure adheres to regulatory and environmental standards.
  7. Partnerships and Roaming: US Cellular forms partnerships and establishes roaming agreements with other wireless carriers, allowing its customers to access coverage and services beyond its own network footprint. These agreements may involve sharing tower infrastructure and network resources with partner carriers.
  8. Customer Focus: US Cellular places a strong emphasis on providing reliable wireless service to its customers, prioritizing personalized experiences and tailored wireless solutions. The company leverages its cell tower infrastructure to deliver network coverage, capacity, and connectivity that meets the unique needs of its customers.

US Cellular’s cell tower infrastructure forms the foundation of its wireless network, enabling the seamless delivery of voice and data services to its customers. With a commitment to network expansion, technological advancements, and customer satisfaction, US Cellular continues to play a vital role in providing reliable wireless connectivity and services in its specific regional markets.

This $1.5 billion company has a forward P/E of 23. Earnings for this year are negative but are expected t jump 77% next year. The stock is selling at a third of book value and has an extremely favorable price sales ratio of 0.36. It does not pay a dividend.

ETFs

If you are looking for more diversification, there are two ETFs with have some connection to the cell tower industry.

Pacer Benchmark Data & Infrastructure RE (SRVR) has a yield of 2.38%%.

Defiance 5G Next Gen Connectivity ETF (FIVG) yields 1.5%.

Keep a close eye on the price action of cell tower stocks, as they could be signaling a compelling buying opportunity, and may be calling your portfolio.

Disclosure: Author didn’t own any of the above at the time the article was written