SBA Communications

Methodology

This EPS-based method has fundamental limitations for SBA Communications as a REIT, since depreciation distorts reported earnings despite stable cash flows from cell tower leases. Investors should use FFO or AFFO-based models instead. The predictable nature of long-term wireless carrier contracts makes cash flow-based valuation straightforward for this infrastructure REIT.

Methodology

Traditional PEG analysis is problematic for SBA given GAAP depreciation distortions. If using PEG, substitute AFFO growth for EPS growth to get meaningful comparisons against tower REIT peers. Growth expectations should reflect 5G densification, carrier lease escalators, and colocation potential on existing towers.

Methodology

SBA offers minimal dividends as management prioritizes reinvestment in tower acquisitions and new builds, making PEGY essentially equal to PEG. Capital allocation focuses on growth through tower portfolio expansion. For tower REITs, AFFO growth and leverage management matter more than dividend yield given the long-term infrastructure growth opportunity.