Aren't there enough cell towers yet? Maybe not. American Tower (AMT -1.30%) owns over 160,000 telecommunications sites all over the world, but there could be lots of opportunities for it to grow, especially in emerging markets and the upcoming introduction of 5G technology.

In this segment from Industry Focus: Financials, host Michael Douglass and Motley Fool contributor Matthew Frankel discuss the prospects for this telecom REIT.

A full transcript follows the video.

10 stocks we like better than American Tower
When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has quadrupled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and American Tower wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of June 4, 2018

This video was recorded on June 4, 2018.

Michael Douglass: Let's turn to our third one. It's interesting that you talked about a tenant going bankrupt, because this third one actually is facing some of that issue right now. We'll talk about that and unpack that a bit more. That's American Tower REIT, ticker AMT, which is really a play on cell towers.

Matt Frankel: Yeah. American Tower owns two things, essentially. They own the land that the cell towers are built on. Most people who are listening can probably see a cell tower from their daily commute to work. They own the land that they're built on and the tower itself. They do not own the antennas, the cables, the other equipment that you see on there. That's where the tenants come in. They buy this land, construct a tower, and a company like, say, Verizon would install their transmitters on the top so customers can have better access to data.

They have 160,000 cell tower sites. This is a big, big, big REIT. It's actually the largest REIT on the market. And it's very international. The name American Tower might throw you, but their biggest market is actually India. About 40,000 of the 160,000 are in the U.S. Almost 60,000 of them are in India. They also have a lot of towers in Brazil, Mexico, Nigeria is a big market. They're pretty much all over the globe.

They're a really nice growth play on emerging markets because of this, because a lot of emerging markets don't have the mobile device penetration that you see in America. This is still a young market in a lot of areas of the world, and there's a lot of growth catalysts domestically, with 5G data transmission expected to be rolled out over the next few years. It's a really big, geographically diverse and very in-demand type of real estate.

Douglass: Yes. A quick note, though, of caution on American Tower. Their organic tenant billings growth is falling off because of Indian carrier consolidation, which I teased a little bit earlier. That's heavily impacting, as you can imagine, their Asia segment. What's interesting, though, about this piece of things, though, is that one of the big concerns with American Tower is that if consolidation happens in, say, for example, the United States -- Sprint and T-Mobile are talking about merging, and that's not the first conversation like this that has occurred. There's a concern that, as these companies work to wring out synergies, that they might end up reducing their AMT footprint. And that's a concern that investors should be aware of.

Now, I think, because of the things you talked about, Matt, particularly 5G, and the fact that the rest of the world is very much going to want to catch up to that, there's still a lot of growth opportunity here. But, we should be aware that they tend to be relatively levered to the market leaders in whatever their country is. Kind of makes sense. And, if that number of market leaders decreases over time as people get bought out, that could be an issue down the line.

Frankel: Yeah, definitely. One of their big drivers of profit is having more than one tenant on a single tower. To Michael's point, I would actually be really curious to see how many, say, Sprint and T-Mobile shared towers there are that won't be necessary if that merger goes through. That's definitely one thing to think about. They could have two, three, even four tenants on the same tower without much of a cost increase to them. This is a great way that they've been driving their profit. And as consolidation happens, if that's where the trend ends up going, you could definitely see that eat into profits.

Douglass: Right. Definitely an issue there. That said, the underlying business metrics look pretty good. The dividend is a 2.2% yield. That's relatively low. But, again, that's in large part because the company has been growing quickly and the dividend hasn't been able to quite keep up. Revenue is up 8% year over year last quarter. Adjusted funds from operations, or AFFO, per diluted share, up 9.5%. This is a company that's growing pretty rapidly, and it looks pretty darn attractive -- particularly, again, for a company of its size, as you mentioned, Matt.

Frankel: Yeah. American Tower is actually 6% of the entire REIT market. That's how big they are. Like you said, they're growing very rapidly. And in a lot of their markets around the world, this technology is still where we were ten, 15 years ago, if that. So, there's still a lot of room to grow.

Definitely watch the consolidation. Like I said, I will be really curious to know how many shared towers there are in their portfolio, especially between the companies that are thinking about merging. But, that's just, like you said, something to keep in mind. This is a very well-covered dividend, very diverse, great revenue stream, and great business model, how they can just add new tenants to towers as they come up.

It's also important to point out that this isn't just cell towers. American Towers' towers also do radio transmission, things like television. They're multi-purpose. It's not just cell technology we're talking about.

Douglass: Right. So, that's American Tower, ticker symbol AMT.