American Tower (AMT) has been through the wringer lately. The telecom infrastructure giant has seen its stock crater 44% from all-time highs, leaving investors wondering if this blue-chip dividend payer can stage a comeback in 2026.

At a recent UBS conference, CEO Steve Vondran made his case for why the selloff is overdone. He pointed to the company’s rock-solid business model, which combines long-term contracts with high operating leverage, ensuring revenue converts to profit at impressive margins.

The company also has an investment-grade balance sheet, which gives it a cost-of-capital advantage over its competitors.

“Our overall goal is to drive industry-leading AFFO per share growth,” Vondran emphasized at the conference.

For the uninitiated, AFFO stands for adjusted funds from operations, which is the cash flow metric that matters most for real estate investment trusts.

Value investors looking for consistent dividend growth should keep an eye on American Tower stock in 2026. Let’s see why. 

American Tower is poised to benefit from higher network capacity

Photo by Frederik Lipfert on Unsplash

Mobile data growth keeps fueling the tower business

American Tower’s bread-and-butter business is simple: own towers and lease space to wireless carriers. The thesis remains intact. Mobile data growth in the U.S. has exploded at roughly 35% annually for the past three years, according to CTIA. That torrid pace shows no signs of slowing.

Industry experts predict carriers will need to double network capacity over the next five years just to keep up with demand. That creates a long runway for new tenant additions and equipment upgrades on American Tower’s sites.

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Vondran explained:

The company is already seeing early signs of network densification, in which carriers add more cell sites to address capacity crunches. This mirrors patterns from previous technology cycles, such as 3G and 4G.

What’s encouraging is that application volumes jumped 20% year-over-year in Q3, as per the recent earnings call. Further, colocation requests surged even faster at 40%, signaling the beginning of a densification wave.

Services revenue hit near-record levels this year, which typically serves as a leading indicator for future tower deployments.

AMT is a dividend growth stock

AMT operates in a mature sector that is fairly recession-resistant, allowing it to generate stable cash flows across business cycles. According to data from Fiscal.ai, it currently offers shareholders an annual dividend of $6.80 per share, which translates to a forward yield of over 4%. 

Here’s how American Tower grew its annual dividends over the past five years:

  • 2025: $6.80 per share
  • 2024: $6.48 per share
  • 2023: $6.45 per share
  • 2022: 5.86 per share
  • 2021: $5.21 per share
    Source: American Tower.

According to Fiscal.ai, in January 2016, the REIT offered investors an annual dividend of $1.96 per share. Over the past decade, AMT has more than tripled its dividend payout, significantly enhancing the yield at cost. 

Its consistent dividend hike has allowed AMT to return 125% to investors over the past decade, after adjusting for dividend reinvestments. 

The DISH problem nobody saw coming

Not everything is rosy for American Tower.

Notably, the company faces uncertainty around DISH Network, which accounts for roughly 2% of global revenues or about $200 million annually. Analysts peg the total exposure at $1.5 billion to $2 billion in net present value terms.

After DISH sold spectrum to AT&T, the satellite provider sent American Tower a letter claiming it was excused from performance under its master lease agreement, which runs through 2036.

American Tower strongly disagrees and filed a lawsuit to enforce the contract.

“We’re open to the idea of trying to resolve this business person to business person,” Vondran said. “But if not, we’ll just continue through the process.”

The courts move slowly, so don’t expect a quick resolution. The company won’t provide detailed 2026 guidance until February earnings, but investors should brace for potential near-term headwinds.

Cost cuts could expand margins significantly

American Tower has been quietly working on a major cost efficiency program that could reshape its margin profile.

Since 2020, American Tower has already expanded EBITDA (earnings before interest, tax, depreciation, and amortization) margins by roughly 300 basis points. Importantly, AMT reduced operating expenses in multiple years despite growing the business.

CFO Rod Smith hinted at more opportunities ahead, particularly on the direct cost side.

“We do see future opportunities as incremental improvements to an already efficient business,” Smith noted during the earnings call.

The company created a new Chief Operating Officer role, which Bud Noel filled. His mandate is to simplify operations globally across the supply chain, technology, service delivery, and network operations.

The goal is straightforward: improve service quality while bending the cost curve down over time. That should help maintain strong margins even as organic growth faces some near-term pressures.

CoreSite data centers provide growth upside

While towers get most of the attention, American Tower’s CoreSite data center business has been growing at a robust pace.

The segment delivered double-digit revenue growth and signed record retail leasing deals in Q3. Management sees a path to sustained double-digit growth as long as it can build capacity fast enough to meet demand.

CoreSite properties are interconnection-rich facilities that let enterprises connect directly to major cloud providers. They’re also seeing growing demand for AI-related workloads, such as inference and machine learning models.

“We have about 296 megawatts of power available and held for future development,” Smith said. “That’s a nice runway as we look out into the future.”

The company has 42 megawatts under construction right now, the highest level in CoreSite’s history. Management is achieving mid-teens or better development yields on new projects.

Importantly, CoreSite gives American Tower optionality as edge computing eventually takes off. Vondran believes the synergies between towers and data centers will play out over time, even if the timing has been slower than initially expected.

Will the REIT continue to grow its dividend?

A focus on cost savings should allow AMT to raise dividends over the next few years. According to Tikr.com, analysts tracking AMT stock forecast revenue to increase from $10.1 billion in 2024 to $13.16 billion in 2029. During this period, adjusted FFO per share is projected to grow from $10.54 to $13.31. 

Wall Street also forecasts AMT to raise its annual dividend from $6.80 per share in 2025 to $9.10 per share in 2030. It suggests the company’s payout ratio will decline from 63.7% to over 68%. 

While the payout ratio is expected to move higher, AMT has sufficient room to reinvest in growth projects, reduce balance-sheet debt, and pursue accretive acquisitions. 

The verdict on a 2026 recovery

American Tower faces real challenges in the near term. The DISH situation creates uncertainty, and industry consolidation with UScellular adds complexity.

Related: Goldman Sachs sends strong message on S&P 500 earnings outlook

But the long-term thesis remains compelling. Mobile data growth continues to accelerate, carriers need to densify networks, and the company has pricing power with its best-in-class tower portfolio.

At current levels, the stock trades at a significant discount to historical multiples. Management clearly sees value here, having repurchased $28 million in shares since quarter-end.

AMT stock is priced at a forward AFFO multiple of 15.5x, which is below its 10-year average of 21.9x. At the current multiple, AMT stock could trade around $211 in late 2028, indicating an upside potential of 25%.

If we adjust for dividends, cumulative returns could be closer to 40%. Given price target estimates, the dividend stock trades at a 30% discount in January 2026. 

American Tower maintains an investment-grade balance sheet with leverage now below 5x, giving it financial flexibility to buy back more stock or pursue strategic opportunities.

Whether American Tower can stage a full recovery in 2026 depends on how quickly it resolves the DISH dispute and whether cost savings can offset slower organic growth. But for patient dividend investors willing to ride out some near-term volatility, the risk-reward looks increasingly attractive.

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