Is Crown Castle Inc. (CCI) the best 5G infrastructure stock to buy right now?

Is Crown Castle Inc. (CCI) the best 5G infrastructure stock to buy right now?

We recently published a list The 13 most profitable real estate stocks currently. In this article, we’ll take a look at where Crown Castle Inc. (NYSE:CCI) currently stands compared to the other most profitable real estate stocks.

Real Estate and the Consequences of the Fed’s Rate Cut

As Redfin reports, buying a home has become affordable for the first time since 2020, with homebuyers needing to earn $115,000 to afford a typical home. While senior economist Elijah de la Campa believes this could be a good time to buy a home as housing affordability improves for the first time in four years, he believes the market will not be cheaper in the near future . This is because the Fed’s recent rate cut and subsequent rate cut plans are already priced into mortgage rates as they were highly anticipated.

In other optimistic news for homebuyers on the sidelines, home payments posted their biggest decline in four years ahead of the Fed’s historic interest rate cut. These payments are down nearly $300 from April’s all-time high. In the four weeks ended September 15, the average housing payment was reportedly $2,534, down 2.7% from a year ago. With lower mortgage rates and less inventory, the housing market is still unaffordable for many, but it’s as good as it can be, says Orphe Divounguy, Zillow’s senior economist.

Regarding the above-mentioned optimism for homebuyers, Robert Reffkin, founder and CEO of Compass, explained that homebuyers are much more active than before. He believes consumers respond more to the change in mortgage rates than to the absolute interest rate itself. He told CNBC that buyers now know not to take a relatively lower interest rate for granted after going through a period of high mortgage rates. The main problem has been the lock-in effect of the last two years, with 75% of homeowners locked into mortgage rates of 4% or less, a percentage now approaching 50%. He assumes that as mortgage interest rates fall, the lock-in effect will diminish and the housing stock will grow.

As mortgage rates have fallen, refinancing has increased sharply. Mortgage applications reached their highest level since July 2022 as interest rates fell. According to the Mortgage Bankers Association, applications to refinance or purchase a home increased 11% week-over-week in the week ending Sept. 20, while the number of refinance applications increased 20% during that period. This marks the 2ndnd Double-digit increases in applications for the week in a row. Overall, refinancing activity is still modest due to seasonal slowdown in home buying, coupled with high home prices and a lack of inventory.

Our methodology:

To compile a list of the 13 most profitable real estate stocks, we created an initial list of the 30 companies with the largest market caps. We then selected those companies that had a positive net profit in the last twelve months and had positively increased their net profit in the last five years. For the 5-year net income growth, we considered the average annual growth rates on a TTM basis. Finally, we ranked the shortlisted companies in ascending order of their hedge funds as of Q2 2024.

At Insider Monkey, we obsess over the stocks hedge funds invest in. The reason is simple: Our research shows that we can outperform the market by mimicking the top stock picks of the best hedge funds. Our quarterly newsletter strategy selects 14 small-cap and large-cap stocks each quarter and has returned 275% since May 2014, outperforming the benchmark by 150 percentage points (Further details can be found here).

A close-up of a row of cell phone towers on a distant hill.

Crown Castle Inc. (NYSE:CCI)

Number of hedge fund owners: 38

5-year net income growth: 10.06%

Crown Castle Inc. (NYSE:CCI) owns, operates and leases over 40,000 cell towers and nearly 90,000 route miles of fiber to support small cell and fiber solutions in all major U.S. markets. The company was founded in 1994 with an initial portfolio of 133 cell towers. In 1998 it went public with around 1,400 towers. The company’s national portfolio of communications infrastructure connects cities and communities with critical data, technology and wireless services.

Crown Castle Inc. (NYSE:CCI) is the nation’s largest shared communications infrastructure provider, poised to benefit from long-term growth in U.S. wireless data demand. The company aims to provide U.S. wireless carriers with the prime real estate they need to operate their networks. Even emerging markets like 5G, the Internet of Things and smart city technologies that are here to stay require the company’s infrastructure solutions.

The consistency and consistency of the company’s operations was reflected in the second quarter results. Crown Castle is right on track to meet its full-year guidance with organic revenue growth of 4.5% in towers, 2% in fiber solutions and double digits in small cells. While the company believes there is a need to grow revenues in the small cell business by double digits over the next few years, the fiber optic solutions business posted growth above expectations of 3%.

With the growing demand for data and information, the company’s unique combination of assets is ready for action. As a result, Crown Castle Inc. (NYSE:CCI) remains in an ideal position to continue its strong, steady trajectory with new growth opportunities for the years ahead. In the second quarter, the stock was held by 38 hedge funds.

Total CCI takes 7th place on our list of the most profitable real estate stocks. While we recognize CCI’s potential as an investment, we believe that some severely undervalued AI stocks have greater prospects of delivering higher returns, and within a shorter time frame. If you’re looking for a heavily undervalued AI stock that has more promise than CCI but trades at less than 5 times earnings, check out our report on it cheapest AI stock.

READ MORE: $30 Trillion Opportunity: The 15 Best Humanoid Robot Stocks to Buy, According to Morgan Stanley And Jim Cramer says NVIDIA has “become a wasteland”.

Disclosure: None. This article was originally published on Insider Monkey.