American Tower

AMT

Market cap $85B

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The REIT sector closed out 2025 with a tough December (-1.48%) and finishing the year with a -3.57% total return for 2025. Small caps (+0.51%) eked out a small gain in December, while mid caps (-1.77%), large caps (-2.55%) and micro caps (-3.88%) fell at the close of the year. 42.04% of REIT securities had a positive total return in December with only 38.36% in the black for the full year.

American Tower remains a global telecom infrastructure leader, delivering stable cash flows and expanding across towers and data centers. Despite recent underperformance versus the S&P 500, AMT continues to post revenue and profitability growth, with strong performance in emerging markets and data centers. Management raised 2025 guidance for property revenue and EBITDA, reflecting confidence in operational momentum and international demand tailwinds.

Although they've underperformed of late, real estate investment trusts are still worth a closer look. The recent rise of interest rates following a prolonged period of below-average levels could help restore REITs' long-term performance.

All 123 publicly traded US equity real estate investment trusts analyzed by S&P Global Market Intelligence traded below their respective consensus price target estimates. The specialty sector, which includes advertising, casinos, communications, data centers, energy infrastructure, farmland and timber, had the largest median implied upside to its consensus price target estimate, at 22.6%. REITs in the self-storage segment showed a 20.6% median implied upside to their consensus price target estimates, while the office sector followed closely at 18.7% and the residential sector at 15.4%.

The latest trading day saw American Tower (AMT) settling at $168.51, representing a -1.07% change from its previous close.

American Tower Corporation offers stable, recurring revenues and is now trading at a reasonable valuation, warranting a Buy rating. AMT benefits from strong operating leverage, multi-tenant towers, and long-term, non-cancellable contracts with low churn and built-in rent escalators. Management expects mid-single-digit organic growth, with potential upside from AI-driven data demand and growing data center exposure.

REITs generate lots of stable income, the bulk of which they must pay out in dividends. Prologis should be the largest dividend payer in the REIT sector this year.

REITs (MSCI US REIT Index, RMZ) are positioned for multi-year outperformance, with accelerating AFFO growth, healthy balance sheets, and discounted valuations. Despite underperformance versus the S&P 500, REITs offer a credible path to 13-15% annualized total returns via multiple expansion and a 4% dividend yield. Wide NAV discounts create near-term catalysts, as managements deploy asset sales, cost controls, and strategic alternatives to close valuation gaps.

Gabelli Funds' Chris Marangi highlights a top pick in the communication services sector and why he expects it to be a standout well beyond 2026.