Lamar Promoting Firm (LAMR – Free Report) is well-poised to learn from its spectacular footprint of out of doors promoting belongings throughout the US and Canada. A diversified tenant base and opportunistic acquisitions augur effectively for its long-term progress. Nevertheless, stiff competitors from different outside advertisers and a excessive rate of interest situation are near-term headwinds.
Lamar Promoting enjoys a formidable nationwide footprint and holds a number one place as a supplier of emblem indicators in the US. The corporate enjoys a diversified tenant base, comprising tenants from the providers, well being care, eating places, retailers, automotive, insurance coverage and gaming classes. Moreover, it sources a big a part of its revenues from native enterprise, resulting in much less volatility in revenues.
Lamar Promoting has made concerted efforts to improve its portfolio over the current years, rising occupancy in its current promoting shows. It holds a big market share within the U.S. outside promoting enterprise. The corporate provides the biggest community of digital billboards in the US, with greater than 4,500 shows as of the tip of the primary quarter of 2023. Additional, its elevated deal with bolstering its digital capabilities is anticipated to drive long-term progress.
Technological developments within the low-cost, out-of-home (OOH) promoting platform are aiding the shift to outside promoting, providing an advantageous situation for Lamar Promoting’s progress. Within the upcoming years, increased know-how investments are anticipated to supply additional help to OOH promoting.
Moreover, the corporate’s enlargement actions over the current years bode effectively for long-term progress. In 2022, it accomplished 73 acquisitions of out of doors promoting belongings for $479.8 million. Additional, it closed 11 offers for about $14 million within the first quarter of 2023. It expects acquisition spending within the band of $100-$150 million within the present 12 months.
Strong dividend payouts stay the largest attraction for REIT buyers and Lamar Promoting stays dedicated to the identical. Within the final 5 years, the corporate has raised its dividend eight instances, and its five-year annualized dividend progress fee is 6.06%, which is encouraging. Test Lamar Promoting’s dividend historical past right here.
Over the previous month, shares of this Zacks Rank #3 (Maintain) firm have rallied 3% in contrast with the trade’s rise of 0.7%.
Picture Supply: Zacks Funding Analysis
Nevertheless, Lamar Promoting faces stiff competitors from different outside advertisers for purchasers, show places and buildings. The corporate additionally competes with different media, together with typical platforms similar to tv, radio, print media, junk mail entrepreneurs and on-line, cellular & social media platforms. These opponents have the benefit of cross-selling complementary promoting merchandise to advertisers.
A excessive rate of interest is a priority for Lamar Promoting. Elevated charges suggest increased borrowing prices for the corporate, affecting its capacity to buy or develop actual property. Furthermore, the dividend payout is prone to develop into much less enticing than the yields on fixed-income and cash market accounts.
Shares to Think about
A few better-ranked shares value contemplating are Ventas (VTR – Free Report) and EastGroup Properties (EGP – Free Report) , every carrying a Zacks Rank #2 (Purchase) at current. You possibly can see the whole checklist of at the moment’s Zacks #1 Rank (Sturdy Purchase) shares right here.
The Zacks Consensus Estimate for Ventas’ current-year funds from operations (FFO) has been revised marginally upward over the past 60 days. Up to now three months, VTR’s shares have rallied 11.8%.
The Zacks Consensus Estimate for EastGroup Properties’ current-year funds from operations (FFO) has been revised marginally upward over the past 60 days. Up to now six months, EGP’s shares have rallied 18.2%.
Word: Something associated to earnings offered on this write-up symbolize FFO — a extensively used metric to gauge the efficiency of REITs.
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