Why American Tower Is a Dividend Investor's Dream

When you invest, it's a good idea to look out for stocks that pay out a consistent, growing dividend, rather than just gunning for capital gains alone. Dividend stocks should have a place in every income seeker's investment portfolio, as they don't just provide a passive source of cash inflow to add to your regular salary, but the growth rate of dividends helps to offset the corrosive effects of inflation. For retirees, this income flow becomes even more crucial as it provides a financial buffer and helps to keep up their lifestyles.

One of the ways to enjoy a sustainable, growing dividend is to invest in businesses that are growing their cash flows over time. Wireless technology, represented by cell towers, is one such sector. The explosion in the use of data makes towers a huge growth trend to watch out for. Real estate investment trusts, such as American Tower (NYSE: AMT), are mandated by law to pay out at least 90% of their annual taxable income to enjoy tax transparency. The company enjoys tailwinds from being in the right sector, while also paying out an increasing level of dividends each year.

American Tower's dividend stream has been a dream for income investors. Here's why.