Crown Castle

Methodology

This method has limited applicability for Crown Castle as a cell tower REIT, since REITs must distribute most income and reported EPS doesn't reflect the cash-generating power of tower assets. The company's revenue comes from long-term tenant leases on wireless infrastructure with high incremental margins. Investors should use AFFO or dividend-focused models rather than traditional earnings metrics for evaluating tower REITs like Crown Castle.

Methodology

Traditional PEG analysis is problematic for Crown Castle because GAAP earnings include significant non-cash depreciation that doesn't reflect towers appreciating in value as wireless traffic grows. If using PEG, substitute AFFO growth for EPS growth to get meaningful results. Even then, tower REITs are better valued on yield, AFFO multiples, and tenant growth fundamentals rather than earnings-based metrics.

Methodology

Crown Castle's dividend yield (typically 3.0-5.0%) is substantial and represents a core component of total returns for a tower REIT. The company balances current distributions with reinvestment in tower acquisitions and small cell infrastructure. PEGY is more relevant than PEG for Crown Castle, though for tower REITs, AFFO yield and growth combined with 5G tenant addition trends offer better valuation insight than earnings-based approaches.