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AMT (American Tower) ROIC % : 5.44% (As of Sep. 2024)


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What is American Tower ROIC %?

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. American Tower's annualized return on invested capital (ROIC %) for the quarter that ended in Sep. 2024 was 5.44%.

As of today (2024-10-31), American Tower's WACC % is 8.19%. American Tower's ROIC % is 6.26% (calculated using TTM income statement data). American Tower earns returns that do not match up to its cost of capital. It will destroy value as it grows.


American Tower ROIC % Historical Data

The historical data trend for American Tower's ROIC % can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

American Tower ROIC % Chart

American Tower Annual Data
Trend Dec14 Dec15 Dec16 Dec17 Dec18 Dec19 Dec20 Dec21 Dec22 Dec23
ROIC %
Get a 7-Day Free Trial Premium Member Only Premium Member Only 7.28 6.45 5.09 4.22 4.99

American Tower Quarterly Data
Dec19 Mar20 Jun20 Sep20 Dec20 Mar21 Jun21 Sep21 Dec21 Mar22 Jun22 Sep22 Dec22 Mar23 Jun23 Sep23 Dec23 Mar24 Jun24 Sep24
ROIC % Get a 7-Day Free Trial Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only Premium Member Only 5.13 13.13 6.63 6.83 5.44

Competitive Comparison of American Tower's ROIC %

For the REIT - Specialty subindustry, American Tower's ROIC %, along with its competitors' market caps and ROIC % data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.


American Tower's ROIC % Distribution in the REITs Industry

For the REITs industry and Real Estate sector, American Tower's ROIC % distribution charts can be found below:

* The bar in red indicates where American Tower's ROIC % falls into.



American Tower ROIC % Calculation

American Tower's annualized Return on Invested Capital (ROIC %) for the fiscal year that ended in Dec. 2023 is calculated as:

ROIC % (A: Dec. 2023 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (A: Dec. 2022 ) + Invested Capital (A: Dec. 2023 ))/ count )
=3776.5 * ( 1 - 10.14% )/( (69315 + 66734.4)/ 2 )
=3393.5629/68024.7
=4.99 %

where

American Tower's annualized Return on Invested Capital (ROIC %) for the quarter that ended in Sep. 2024 is calculated as:

ROIC % (Q: Sep. 2024 )
=NOPAT/Average Invested Capital
=Operating Income * ( 1 - Tax Rate % )/( (Invested Capital (Q: Jun. 2024 ) + Invested Capital (Q: Sep. 2024 ))/ count )
=4556.8 * ( 1 - 22.23% )/( (66148 + 64243.7)/ 2 )
=3543.82336/65195.85
=5.44 %

where

Note: The Operating Income data used here is four times the quarterly (Sep. 2024) data.

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.


American Tower  (NYSE:AMT) ROIC % Explanation

ROIC % measures how well a company generates cash flow relative to the capital it has invested in its business. It is also called ROC %. The reason book values of debt and equity are used is because the book values are the capital the company received when issuing the debt or receiving the equity investments.

There are four key components to this definition. The first is the use of operating income or EBIT rather than net income in the numerator. The second is the tax adjustment to this operating income or EBIT, computed as a hypothetical tax based on an effective or marginal tax rate. The third is the use of book values for invested capital, rather than market values. The final is the timing difference; the capital invested is from the end of the prior year whereas the operating income or EBIT is the current year's number.

Why is ROIC % important?

Because it costs money to raise capital. A firm that generates higher returns on investment than it costs the company to raise the capital needed for that investment is earning excess returns. A firm that expects to continue generating positive excess returns on new investments in the future will see its value increase as growth increases, whereas a firm that earns returns that do not match up to its cost of capital will destroy value as it grows.

As of today, American Tower's WACC % is 8.19%. American Tower's ROIC % is 6.26% (calculated using TTM income statement data).


Be Aware

Like ROE % and ROA %, ROIC % is calculated with only 12 months of data. Fluctuations in the company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.


American Tower ROIC % Related Terms

Thank you for viewing the detailed overview of American Tower's ROIC % provided by GuruFocus.com. Please click on the following links to see related term pages.


American Tower Business Description

Address
116 Huntington Avenue, 11th Floor, Boston, MA, USA, 02116
American Tower owns and operates more than 220,000 cell towers throughout the us, Asia, Latin America, Europe, and Africa. It also owns and/or operates 28 data centers in 10 us markets after acquiring CoreSite. On its towers, the company has a very concentrated customer base, with most revenue in each market being generated by just the top few mobile carriers. The company operates more than 40,000 towers in the us, which accounted for almost half of the company's total revenue in 2023. Outside the us, American Tower operates over 75,000 towers in India, almost 50,000 towers in Latin America (dominated by Brazil), 30,000 towers in Europe, and nearly 25,000 towers in Africa. American Tower operates as a REIT.
Executives
Sanjay Goel officer: EVP & President, Asia-Pacific 116 HUNTINGTON AVENUE, BOSTON MA 02116
Eugene M Noel officer: EVP & President, U.S. Tower 116 HUNTINGTON AVENUE, BOSTON MA 02116
Olivier Puech officer: EVP & President, LatAm & EMEA 116 HUNTINGTON AVENUE, BOSTON MA 02116
Steven O Vondran officer: EVP & President, U.S. Tower 116 HUNTINGTON AVENUE, BOSTON MA 02116
Meyer Robert Joseph Jr officer: SVP & Chief Accounting Officer 61 SCHOOL STREET, ARLINGTON MA 02476
Robert D Hormats director 85 BROAD STREET, NEW YORK NY 10004
Rodney M Smith officer: EVP, CFO & Treasurer 116 HUNTINGTON AVENUE, BOSTON MA 02116
Reeve Pamela D A director C/O AMERICAN TOWER CORPORATION, 116 HUNTINGTON AVE, BOSTON MA 02116
Samme L Thompson director C/O TELIT ASSOCIATES, INC., 333 NORTH MICHIGAN AVENUE, CHICAGO IL 60601
Joann A Reed director C/O AMERICAN TOWER CORP, 116 HUNTINGTON AVENUE, BOSTON MA 02116
Raymond P Dolan director 108 GOVERNOR DRIVE, BASKING RIDGE NJ 00924
Ruth T Dowling officer: EVP, Chief Admin Ofr, GC & Sec 116 HUNTINGTON AVENUE, BOSTON MA 02116
Edmund Disanto officer: EVP, Chief Admin Ofr, GC & Sec C/O AMERICAN TOWER CORPORATION, 116 HUNTINGTON AVENUE, 11TH FLOOR, BOSTON MA 02116
Bruce L Tanner director 214 N TRYON STREET, CHARLOTTE NC 28202
Kelly C Chambliss director C/O CORESITE REALTY CORPORATION, 1001 17TH STREET, SUITE 500, DENVER CO 80202