Covered, but stretched — thin AFFO cushion after a cut. A 4.94% yield on a $1.0625 quarterly dividend is covered by AFFO, but only just: the $4.25 annual dividend is about 92% of the $4.60 midpoint of 2026 AFFO guidance, leaving almost no cushion. Q3 AFFO was $1.24 per share, up 11% year over year, but site rental revenue fell 5% on DISH terminations and Sprint cancellations, leverage is 6.5×, and this dividend was already cut once — from $1.565 to $1.0625 in 2025 — so the record argues for caution, not comfort.
Key risk: Carrier churn — DISH terminations cost $61 million of Q3 site rental revenue, and with revenue concentrated in a few carriers, another large non-renewal hits AFFO directly against a 92% payout.
Changes if: AFFO payout pushes past ~92% toward 100%, or net debt to Adjusted EBITDA rises materially above 6.5×. The cushion, not the headline yield, is the tripwire.
- ✓AFFO coverage check: AFFO guidance of $4.54–$4.66 per share for 2026 covers the $4.25 annual dividend — about 92% paid out at the midpoint. Covered, but the cushion is the thinnest in this batch.
- ✓Yield check: 4.94% indicated — $1.0625/qtr × 4 at the $85.97 close on Oct. 23, 2026. Earned tower rent income, not a special or return of capital — but the rate was cut 32% in 2025, so the yield carries cut history.
- !Balance-sheet check: Net debt to Adjusted EBITDA of 6.5× at September 30, 2026 — the highest leverage in this batch — with site rental revenue down 5% year over year in Q3.
What this grade doesn't say: It screens the dividend only — covered, real, compounding. It says nothing about valuation or price: a well-covered payer can still be overpriced, and its price can still fall.