This Income Play Is Trending Higher – And May Have More Value to Unlock

While growth stocks have staged a strong comeback in recent weeks, income stocks remain well off their highs. The good news is that these stocks offer a historically higher yield than at most other points over the last two years.

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  • And should interest rates start to trend down next year, income stocks should trend higher to match that change in yields. That means today’s investors can get a relatively high yield, plus see some capital appreciation ahead.

    One income-heavy space is cell tower REITs. They’re real estate vehicles, that benefit from cell tower networks.

    Crown Castle International (CCI) is one such play – and now also has an activist investor looking for ways to better improve the company’s value.

    While shares have jumped higher in recent weeks, shares are still down 25 percent over the past year. And the dividend yield has been pushed to 6 percent.

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  • Action to take: Investors looking for high and safe income can get it with this 6 percent yield today. However, cell tower REITs, like most REITs, can be a bit slow for raising their payouts over time.

    For traders, the activist news sent shares higher. The stock likely has a bit more upside going into the end of the year. The January 2024 $115 calls, last going for about $1.20, could see high double-digit returns or better in the coming weeks.

     

    Disclosure: The author of this article has no position in the company mentioned here, but may trade after the next 72 hours. The author receives no compensation from any of the companies mentioned in this article.

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